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รายงานประจํ าป 2558 Annual Report 2015 บริษัท สหวิรSteel ิยาสตีลIndustries อินดัสตรี จํPublic ากัด (มหาชน) Sahaviriya Company Limited


Contents Vision, Mission and Values Performance Highlights Message from the Chairman Business’s Strategy and Overview Significant Changes and Development in 2015 SSI Group Structure Relationship with Major Shareholder’s Group of Business Business Description Revenue Structure Steel Industry and Market Overview Report of the Audit Committee for 2015 Report of the Risk Management Committee for 2015 Risk Factors General Information and Other Key Information Major Shareholders Dividend Policy The Board of Directors The Management Shareholding of Directors and Management Report of the Nomination and Remuneration Committee for 2015 Remuneration of Directors and Management Organisation Chart Good Corporate Governance Committee’s Report for 2015 Good Corporate Governance Social and Community Contribution Internal Control and Risk Management Related Party Transactions Key Financial Information Report on the Responsibility of the Board of Directors for 2015 Financial Report Management Discussion and Analysis Independent Auditor’s Report Financial Statements Notes to the Financial Statements

001 002 004 006 008 010 012 013 017 018 021 024 025 030 033 034 035 047 055 056 059 062 064 066 098 104 106 110 126 127 138 142 155


Vision & Mission

Innovate premium value steel products and services for customers; generate consistent profit and sustainable value for stakeholders Values integrity

aim for excellence

We do what we say

teamwork One for all, all for one

The best is yet to be

i F a c t s Fighting spirit

can change

service-mind

Never give up

Be the leader of change

Deliver more than expected


002

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Performance Highlights

Performance Highlights

Financial Highlights Sales and Service Revenues Total Revenue Cost of Sales and Services Gross Profit (Loss) Profit (Loss) Attributable to Owners of the Company Total Assets Total Liabilities Total Equity Equity Attributable to Owners of the Company Net Profit (Loss) Margin Return on Equity Return on Asset Interest Bearing Debt to Equity Ratio Earning (Loss) per Share Book Value per Share

Million Baht Million Baht Million Baht Million Baht Million Baht Million Baht Million Baht Million Baht Million Baht % % % Times Baht Baht

Key Data of “Ssi� Share Closing Price 1) High Price Low Price Average Price Number of Listed Shares Par Value Average Daily Trading Volume Average Daily Trading Value Market Capitalisation 1) Foreign Limit Foreign Ownership 2) Free Float 2) P/E Ratio 1) Dividend per Share Dividend Yield

20,173 20,495 19,392 781 (40,840) 28,665 64,904 (36,239) (36,946) (202.45) N.A. (77.12) N.A. (1.27) (1.15)

Baht Baht Baht Baht Million Shares Baht Million Shares Million Baht Million Baht % % % Times Baht %

2015

2015 0.04 0.31 0.03 0.11 32,166 1.00 81 9 1,287 49.00 27.61 50.38 N.A. - -

As at the last business day in December As at the last business day in December or the latest closing date of the share register book, as the case may be. 3) 2013 Figures were before reclassification on a break-up basis. 1) 2)

2014

(Restated)

33,092 33,344 30,836 2,256 (4,903) 77,252 71,792 5,460 4,660 (14.82) (67.84) (6.05) 9.61 (0.15) 0.14

2014 0.29 0.44 0.27 0.35 32,166 1.00 57 20 9,328 49.00 30.41 44.68 N.A. - -

2013 3) 65,387 65,892 70,250 (4,863) (7,053) 84,726 74,116 10,610 9,794 (10.79) (62.52) (8.14) 4.89 (0.24) 0.30

2013 0.30 0.72 0.30 0.55 32,166 1.00 86 47 9,650 49.00 30.31 48.45 N.A. -


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Performance Highlights

003

Sales and Service Revenues

Net Profit (Loss)

Million Baht

Million Baht 65,387

2015

33,092

2014

2013

(4,903)

(7,053)

20,173

2015

2014

(40,840)

2013 1)

(Restated) 1)

2013 Figures were before reclassification on a break-up basis

Market Capitalisation

SSI’s Sales Volume and Thailand HRC Consumption SSI’s HRC Sales Volume (Million Tons) Thailand HRC Consumption (Million Tons)

Average Trading Volume and Average Daily Trading Average Trading Volume (Million Shares) Average Daily Trading (Million Baht) 9

1.13

2015

1,287 Million Baht

2015

2015

6.49

81

1.47

20

2014

9,328

2014

2014

Million Baht 6.96

57

2.13

2013

47

9,650

2013

2013

Million Baht 7.52

86


Message from the Chairman

004

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Dear Shareholders Global steel’s severe over-capacity since late 2014 mainly resulted from 1) China’s all-time high export due to China’s severe over-capacity owing to an unfair subsidised steel export, distorting export tax rebate system and China’s sluggish steel demand as a result of slowing economy and 2) extraordinary depreciation of the Russian Ruble and the Ukrainian Hryvnia due to political unrest, had caused the supply and demand of steel products a serious imbalance. In addition, commodity prices and steel prices had fallen steadily, causing a huge operating loss for the Group in 2015, especially the Upstream Business in the United Kingdom, operated by Sahaviriya Steel Industries UK Limited (“SSI UK”) which is a subsidiary of the Company. The Company has been continuously reporting significant events that occurred to the Group to the Stock Exchange of Thailand (“SET”). The sequences of events taking place from September 2015 until presently are as follows:

1. 18 September 2015 SSI UK notified a suspension of slab production. 2. 21 September 2015 The group of banks which are creditors of SSI UK comprising The Siam Commercial Bank Public Company Limited, Krung Thai Bank Public Company Limited, and TISCO Bank Public Company Limited (collectively, the “Major Creditors”) demanded SSI UK to pay its obligation under the loan conditions and requested the Company to be jointly responsible in such payment of the obligation as a guarantor of SSI UK for the obligation amounting to USD 790 million, or approximately Baht 28 billion. 3. 1 October 2015 The Major Creditors demanded the Company to pay its obligations under the loan conditions for an amount of Baht 23.9 billion, additionally to SSI UK’s case. 4. 1 October 2015 As the Company had discussed with the Major Creditors, in order to obtain the solution for the HRC Business of the Company to be able to carry on operations as normal, including to maintain business value, the Company decided to submit a petition for Business Rehabilitation to the Central Bankruptcy Court (the “Court”). The Court ordered to accept the petition of the Company on the same day as the black case No. For. 23/2558 and specified the inquiry on the petition on 21 December 2015. 5. 2 October 2015 SSI UK submitted a petition for liquidation to the High Court of Justice Chancery Division Manchester District. 6. 21 December 2015 The litigants preferred to prepare and bring the witnesses to testify on the Court proceedings. The Court, then, specified the next inquiring date on 17 February 2016. 7. 17 February 2016 The Court finished the inquiry and issued the date for the Court’s order regarding the Company’s petition for Business Rehabilitation on 10 March 2016. 8. 10 March 2016 The Court issued an order for the Company’s Business Rehabilitation and appointed the Company as a Plan Preparer.

The next key step is that the Company, as a Plan Preparer, will prepare the Business Rehabilitation Plan (the “Plan”) within 5 months after the appointment of the Plan Preparer is announced in the Royal Gazette. The Company then will submit the Plan to the Official Receiver, in order that the Creditors’ Meeting passes the resolution accepting the Plan, and the Plan will be proposed to the Court for an approval accordingly. Subsequently, the Company will carry out its business strictly following the Business Rehabilitation Plan. And, after the Business Rehabilitation has been successfully completed pursuant to the Plan, the Company will submit a request to exit the Business Rehabilitation through court proceedings.


Message from the Chairman

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

005

The Company would like to additionally inform shareholders that, since 10 March 2016, the date on which the Court issued an order for the Company’s Business Rehabilitation and appointed the Company as a Plan Preparer, the power to manage the business and assets of the Company’s Board of Directors and Management has been terminated. In addition, the legal rights of the shareholders of the Company (with restriction on the right to receive the dividends - if any) have been temporarily suspended. Power and rights of the shareholders will fall within the duty of the Plan Preparer by law. However, as the Court appointed the Company as a Plan Preparer, the Company’s Board of Directors are authorised to continually manage business and assets of the Company, as a Plan Preparer. According to the Rehabilitation Law, the Plan Preparer will use legal rights for shareholders, until the Court issues an order approving the Plan. After the Court approves the Plan, the right and duties of the Plan Preparer shall pass to the Plan Administrator accordingly. Therefore, subsequent to the Court’s order for the Company’s Business Rehabilitation, the Company will not be required to hold the Annual General Meeting of Shareholders, until the Company exits Business Rehabilitation. Nevertheless, the Company realises the importance of communication and dissemination of significant information to shareholders. Plus, the Company is accountable for reporting to SET, regarding the progress on the Company’s Business Rehabilitation and periodical operating results. The Company’s shareholders are still able to find an electronic publication of the Annual Report and CSR Report, as well as updated information of the Company from reports submitted to SET, or the Company’s website at http://www.ssi-steel. com. Additionally, shareholders could reach the Company’s Investor Relations via phone no. 0-2238-3063-82, or E-mail: ir@ssi-steel.com. The Company’s Board of Directors, acting as directors of the Plan Preparer, is committed to performing its best in overseeing the Company on the principles of good governance, as well as preparing the Business Rehabilitation Plan, in order that the Plan is fair, practical, accepted by creditors and approved by the Court, for the Company’s successful Business Rehabilitation as planned. On behalf of the Company’s Board of Directors, I would like to thank shareholders, customers, financial institutions, suppliers, community, concerned government agencies and private organisations, including the Company’s management and employees for the support all along in every activity, even though the Company is facing a difficult situation as well as collaboration in the future. Your support will encourage the Company to successfully complete Business Rehabilitation, in order to move the business forward, overcome the debt burden and generate normalised profit in the future.

sSI

Message

from the Chairman

Mr. Wit Viriyaprapaikit

Chairman of the Board of Directors


006

Business’s Strategy and Overview

Business’s Strategy and Overview

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Sahaviriya Steel Industries Public Company Limited (“the Company” or “SSI”) is Thailand’s first manufacturer of hot-rolled steel sheet in coils (“HRC”) and the largest fully-integrated flat steel producer in Southeast Asia. The SSI Bangsaphan Steelworks is a mid-stream steel manufacturer plant, with a capacity of 4.0 million tons per year for HRC and 1.0 million tons per year for HRC


Business’s Strategy and Overview

pickled and oiled. The Company’s main strategy is “Innovate Premium Value Products” to serve the growing demand of the region in various sectors such as automobile, energy, electrical appliances, packaging, transportation, and construction. SSI has joint-venture investments in key downstream projects – namely Thai Cold Rolled Steel Sheet Public Company Limited (“TCRSS”), Thailand’s first and largest cold-rolled steel mill with a capacity of 1.2 million tons per year, and an equity investment in Thai Coated Steel Sheet Company Limited. (“TCS”), Southeast Asia’s first and largest electro-galvanising steel mill with its capacity of 240,000 tons per year. All plants of SSI Group in Thailand are located on the western coast of the Gulf of Thailand in Bangsaphan District, Prachuap Khiri Khan Province, 400 kilometers from Bangkok, which is considered the best strategic place to operate the fully-integrated steel business in Thailand. For the further integration, SSI has also invested in Prachuap Port Company Limited (“PPC”) to operate the private deepest commercial sea port in Thailand, which allows import and export of raw materials and finished products on a large scale. SSI extends its engineering capabilities into its wholly-owned subsidiary, West Coast Engineering Company Limited (“WCE”), which provides the engineering services including the industrial maintenance management, design and production of machinery and spare parts, steel structure and fabrication. WCE also provides the Integrated EPC (Engineering Procurement and Construction) services including engineering design, procurement of machinery and equipment, construction of turn-key projects for industrial and process plants. As of 31 December 2015, SSI Group employed 2,300 employees. SSI Group has continued its policy to recruit locally. The ratio of local employee at the end of 2015 was 89% at SSI Bangsaphan Steelworks.

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

007

The business of SSI Group are divided by business as follows:

Steel Business HRC Business operated by SSI, supplying to clients in automobile and automotive parts industries, electrical appliances, gas cylinder, steel pipes, and construction, as well as the raw materials for downstream industries. Downstream Business of the Group consists of Cold Rolled Coil Business operated by TCRSS, using SSI’s high-grade HRC as a raw material for its production, and Coated Steel Sheet Business operated by TCS, using cold rolled steel sheet as a raw material for its production.

Port Business SSI has jointly invested in PPC, which operates 4 berths with its capability to accommodate two vessels up to 100,000 dead-weight tons (“DWT”) at the same time. In 2012, PPC has commercialised the PPC Shore Crane project of two mobile harbor cranes with the maximum lift weight of 100 tons in order to reduce cost of transportation and increase efficiency of the steel products handling process.

Engineering Business This business is operated by WCE, originally to provide services to SSI Group. WCE has now extended its services to other customers, both domestic and overseas, in various industries such as steel, paper, cement, energy, and petrochemicals.


008

Significant Changes and Development in 2015

Significant Changes and Development in 2015

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

24 April 2015 • The Company registered the reduction of its registered capital with the Registrar, Business Development Department, Ministry of Commerce, from Baht 39,867,778,559 to Baht 34,263,663,124 by way of canceling its 5,604,115,435 authorised but unissued shares having the par value of Baht 1 per share; except the unissued shares of 2,907,405,000 shares which were authorised for the conversion of the Company’s convertible debentures into ordinary shares.

30 April 2015 20 April 2015 • The 26th Annual General Meeting of Shareholders resolved to approve an increase of the Company’s registered capital from Baht 34,263,663,124 to Baht 50,263,663,124 by issuing 16,000,000,000 newly issued ordinary shares with the par value of Baht 1 per share to persons under the Private Placement, who are not a connected person of the Company. The Capital increase was required to finish within one year since the annual general meeting of shareholders’ approval resolution.

22 April 2015 • The Company received Certificate of ESG 100 Company from Thaipat Institute, as a listed company in the category of Industrials with outstanding Environment, Social and Governance (ESG) performance.

• The Company registered the increase of its registered capital with the Registrar, Business Development Department, Ministry of Commerce, from Baht 34,263,663,124 to Baht 50,263,663,124 by issuing 16,000,000,000 newly issued ordinary shares at the par value of Baht 1 per share.

22 May 2015 • The holders of Subordinated Convertible Debentures of Sahaviriya Steel Industries Plc. No. 1/2012 (“Convertible Debentures”) exercised the conversion rights to convert the convertible debentures of 4 units in an aggregate principal amount of Baht 4,000. The stated exercised convertible debentures were converted into 4,000 new ordinary shares of the Company at the par value of Baht 1 per share. Consequently, the Company’s paid-up capital increased from Baht 32,166,258,124 to Baht 32,166,262,124.

25 May 2015 • The Company paid the last interest payment, together with the principal repayment for the remaining 275 units Convertible Debentures to the holders, amounting to Baht 275,000.


Significant Changes and Development in 2015

2 July 2015 • The Company received Thailand Outstanding Company Award for Safety, Occupational Health and Working Environment 2015 (4th consecutive year) held by the Ministry of Labour.

17 July 2015 • The Company received the National Outstanding Industrial Establishment Award in Labour Welfare/Relations Category in 10 consecutive year type (2006 - 2015) held by the Ministry of Labour.

18 September 2015 • SSI UK notified the temporary pause of slab production while awaiting the outcome of ongoing discussions with stakeholders to reduce production cost and stop loss at the Upstream Business.

21 September 2015 • The group of creditors of SSI UK, which are The Siam Commercial Bank Public Company Limited, Krungthai Bank Public Company Limited, and TISCO Bank Public Company Limited (collectively, the “Major Creditors”), demanded SSI UK to pay its obligations under the loan conditions due to some uncertainties from uncontrollable factors which could result in an uncertainty in operation recommencement of SSI UK. In addition, according to its financial position, SSI UK could not respond to the demand of the Major Creditors. Therefore, the Major Creditors requested the Company to be jointly responsible as a guarantor of SSI UK for the obligation amounting to USD 790 million or approximately Baht 28 million.

23 September 2015 • The Company received Industry Award 2015 for Outstanding Safety Management and Quality Management held by the Ministry of Industry. 1 October 2015 • Additionally to SSI UK’s case, the Major Creditors demanded the Company to pay its obligation under the

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

009

loan conditions amounting to Baht 23.9 billion, as the Company had liabilities exceeding its total assets. As the Company discussed with the Major Creditors to obtain the solution for the HRC Business of the Company to be able to carry on operations as normal, including maintaining the Company’s business value, the Board of Directors deemed that the Company should enter into Business Rehabilitation for its debt restructuring. As a result, the Board of Directors approved the Company to submit a petition for Business Rehabilitation to the Central Bankruptcy Court (the “Court”) on 1 October 2015 and approved the Company to act as the Planner of the Business Rehabilitation. • The Company submitted a petition for Business Rehabilitation to the Court, and the Court ordered to accept the petition of the Company on the same day. The preliminary hearing was scheduled on 21 December 2015.

2 October 2015 • The High Court of Justice Chancery Division Manchester District accepted the petition for SSI UK’s liquidation. As a result, SSI UK has been in liquidation ever since, and the Board of Directors of SSI UK ceased to have any control of SSI UK’s affairs accordingly.

21 December 2015 • The litigants preferred to prepare and bring the witnesses to testify on the Court proceedings. The Court, then, specified the next inquiring date on 17 February 2016.

17 February 2016 • The Court finished the inquiry and issued the date for the Court’s order regarding the Company’s petition for Business Rehabilitation on 10 March 2016. 10 March 2016 • The Court issued an order for the Company’s Business Rehabilitation and appointed the Company as a Plan Preparer. • The Company notified its guidelines to remove causes of possible delisting.


010

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

SSI Group Structure Hot Rolled Coil Business

Sahaviriya Steel Industries Public Company Limited Manufacturer of hot-rolled coil Manufacturer of hot-rolled coil pickled and oiled

Core business

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

011

35.19%

3.7%

51%

99.99%

Cold Rolled Coil Business

Coated Steel Sheet Business

Port Business

Engineering Business

Thai Cold Rolled Steel Sheet Public Company Limited Manufacturer of cold-rolled steel sheet

Increase revenues and enhance sustainable growth

Thai Coated Steel Sheet Company Limited Manufacturer of deep-sea port

Increase revenues and enhance sustainable growth

Prachuap Port Company Limited Provider of the private commercial sea port

Reduce costs and increase revenues

West Coast Engineering Company Limited Provider of engineering services

Reduce costs and increase revenues


012

Relationship with Major Shareholder’s Group of Business

Relationship with Major Shareholder’s Group of Business

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

The Company and its subsidiaries are part of a business group of Sahaviriya Group, a major shareholder of the Company. Sahaviriya Group is engaged in manufacturing and distributing of steel products. The details of related transactions have been disclosed in the Related Party Transactions.

The Company has a relationship with its major shareholder’s group of businesses as a business partner. Generally, the Company wholesales its products to both domestic and overseas customers. Domestic customers are both the Company’s related parties and non-related parties consisting of end-users and traders and coil centers. The Company has no policy to directly do business with retailers or hold shares in the business of its traders and coil centers due to the associated credit risk. One of the common strategies for the business is to separate manufacturer from distributor. As such, there are related companies under Sahaviriya Group which have been established as distributors of HRC and other steel products before the Company’s establishment as a manufacturer. The Company has become a major supplier for those related companies with similar sales portion compared with non-related customers. The Company has a mechanism to protect the rights of shareholders to ensure that they are treated fairly. The Company, as a hot rolled coil manufacturer, has applied the same pricing policies which depend on ordering quantity and frequency to both related and non-related parties. For related party transactions, the Company usually discloses the transfer pricing policies in the notes to the financial statements.


Business Description

Business Description

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

013

Product Description Hot rolled steel sheet in coil, which is a raw material for industries such as heavy construction, steel pipe, gas cylinder, automotive parts, electric appliance, steel furniture, container, cold re-rolling, pressure vessel, shipbuilding and coil service centre.

Hot-rolled steel sheet in coil includes:

• Hot-rolled steel sheet in coil for domestic use according to TIS standard and international standards including Japanese, American, DIN and British with width between 750 and 1,550 mm and thickness between 0.9 and 20.0 mm. The hot-rolled coil capacity expansion project, to expand production capacity to 4 million tons per annum, was completed in February 2005. The production capability has been improved to produce hot-rolled coils with thickness ranging from 0.9 mm to 20.0 mm with continuous improvement and reduced cost. SSI was one of a few mills which could produce commercial hot-rolled steel sheet in coil at 0.9 mm in thickness in 2008 and achieved production at 0.8 mm in thickness recently. • Hot-rolled pickled and oiled steel or “CleanStrip”, high-grade product, are delivered to the automotive industry or for use in electrical appliances. The width is between 750 and 1,550 mm and thickness between 1.2 and 6.5 mm. This has been under way since May 2004. SSI adheres to product development to improve quality to meet customer demand and to take our place as a leader in the high quality hot-rolled coil market. We focus on innovation of Premium Value Product to the market with specific characteristic as follows:


014

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Business Description

1. High Grade Products, for use of high quality hot-rolled coil for re-rolling mill, automotive parts and electric appliances. 2. Unique Products, oligopoly products or specific products of SSI such as thin gauge hot-rolled coil product or checkered plate. 3. Innovated Value Products which can increase customer’s profit in various ways, to be used in production or as a finished good.

Marketing and Competition A marketing plan was produced by SSI for effective sales management, focusing on the key areas: raw material procurement; continuous quality improvement; maintaining market share; customer requirement responsiveness; along with on-time delivery and efficient customer service.

Marketing Strategy SSI mainly focuses on the domestic market covering all market segments that could enhance competitiveness over imported steel product. SSI also maximises its market share by developing competitive pricing and customer service strategies. In addition, SSI expands the high-end market into new customers by producing a premium quality of hot-rolled steel. The Company also exports when it has sufficient capacity, and the market situation is favorable.

Target Customers SSI specifically targets hot-rolled steel sheet users in downstream industries, for example cold-rolled steel producers, cars and automotive parts makers, electrical appliances and furniture producers, gas cylinder and container producers, steel pipe producers and construction industries. Customers also include service centres and trading firms.

Types of Customer, Pricing Policies and Distribution Channels

SSI clients are divided into 4 groups as follows:

1. Domestic Market A1 includes cold-rolled steel manufacturers and manufacturers of gas cylinders whom the Company directly sells to. There are 4 cold-rolled steel manufacturers in Thailand whose cold-rolled steels are used as raw materials for the coated steel industry. This customer group requires an emphasis on surface quality, on-time delivery and price stability. Sales/purchase agreements are on a quarterly/monthly basis in US dollar and/or Thai Baht depending on the agreement. 2. Domestic Market A2 includes hot-rolled steel sheet pickled and oiled coils and the high grade hot-rolled steel market. End users are automotive and parts makers, electric appliance producers, as well as furniture and container manufacturers. Steel processing is provided by the Service Centre. Sales and purchasing agreements are completed through trading firms, with an importance being placed on the quality of the steel product, particularly its mechanical properties and the steel surface. Price stability and on-time delivery are also required by this group of customers which leads to sales/purchase agreements mostly made on a quarterly basis in Thai Baht. 3. Domestic Market A3 includes hot-rolled coils with value-added from innovation market, such as goods shelves and scaffolding manufacturers. This group focuses on mechanical properties as well as quick delivery as customers require hot-rolled steel sheet for fabrication  following the requirements of end customers. The Company sets a selling price on a monthly basis in Thai Baht and distributed through trading firms.


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Business Description

015

4. Domestic Market B includes steel pipe makers and general users. This group of customers is price sensitive. SSI is therefore required to compete with importing companies. Sales takes place on a spot basis by direct users, trading firms and service centers. 5. Export Market includes cold-rolled steel manufacturers and general users requiring thin gauge coils thickness less than 2.0 mm. Sales takes place on a spot basis and depend on the global market situation and US dollar or Euro currency rates. Normally, the Company sets up the pricing for exports not less than the domestic market price with most sales being made through foreign trading companies. Sales Ratio of Hot-Rolled Steel Products by Market (%)

Year 2013 2014 2015

A1 8.9 7.6 9.4

A2 7.9 12.4 33.3

A3 - - 1.9

B 81.8 79.6 55.4

Export 1.4 0.4 0.0

Total 100 100 100

SSI plans to continuously increase the proportion of premium value products (PVPs). However, the PVPs sales volume in 2015 was 408,260 tons, a decrease of 27% compared with 2014 from decreased total HRC Sales Volume due to high volume import of downstream steel products such as steel pipes and galvanized steel sheet, as well as a sharp drop in the world steel prices and uncertainty about the Company’s financial situation during an early stage of the Company’s petition for Business Rehabilitation, causing customers to prolong their orders. The proportion of PVPs to total HRC Sales Volume was approximately 36%. The Proportion of Premium Value Products to Total Sales Volume (%) Product Type Premium Value Products Commercial Products

2013 34 66

2014 38 62

2015 36 64

Hot-rolled Steel Industry in Thailand Historically, hot-rolled steel had to be imported from abroad until SSI opened the first hot strip mill in Thailand in 1994. Currently, there are 5 hot-rolled steel manufacturers in Thailand as follows: Hot-rolled Steel Manufacturers in Thailand Hot-rolled Steel Manufacturers 1) Sahaviriya Steel Industries Plc. 2) G Steel Plc. 3) G J Steel Plc. 4) Sahaviriya Plate Mill Plc. 5) LPN Plate Mill Plc.

Maximum Capacity (Tons/year) Production Began 4,000,000 February 1994 1,800,000 End of 1999 th 1,500,000 4 Quarter 1997 1,000,000 1996 500,000 1996

Product Hot-rolled Steel Coil Hot-rolled Steel Coil Hot-rolled Steel Coil Hot-rolled Steel Plate Hot-rolled Steel Plate


016

Business Description

According to Thailand Apparent HR Sheet Consumption Statistics provided by the Iron and Steel Institute of Thailand (ISIT), in 2015 SSI had 16% of the approximate hot-rolled steel demand market share, decreasing from 21% in 2014. Imports had 62% market share, increasing from 59% in a year earlier. The other 4 domestic manufacturers had 22% in total, improving from 20% in 2014. If focusing only the hot-rolled steel coil market, SSI’s share is 17%, a decrease from 22% in the previous year. Imports market share was 62%, an increase from 60% in a year earlier. The other 2 domestic manufacturers had a combined market share of 21%, improving from 18% in 2014 due to uncertainty about the Company’s financial situation during an early stage of the Company’s petition for Business Rehabilitation, causing customers to temporarily prolong their orders in a wait-and-see situation.

Product Procedure Production The Company has one Hot Strip Mill to produce Hot-rolled steel sheet in coil and one Pickling and Oiling (P/O) Line to produce Hot-rolled pickled and oiled steel or “CleanStrip”, located in the same area in Bangsaphan District of Prachuap Khiri Khan Province.

Capacity and Production Policy Hot Strip Mill has maximum capacity of 4.0 million tons per annum and effective capacity at 3.2 million tons per annum. The Company’s policy is to produce according to customer orders (Made to Order) including manufacturing in order to have an inventory of approximately one month (Made to Stock) from which products will be selected by considering market demand and appropriate technical production. There is a monthly advance production plan which provides 3 production shifts per day, 8 hours per shift. There is also a 10 day maintenance break annually.

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Raw Material The Company uses slab as an only raw material for the rolling process. As there was no slab production in Thailand, all slabs are imported from abroad. Slab is a flat steel semi-finished product produced from the iron and steel making process. After the casting process, slab will come out with thickness of 160 - 250 mm, width 800 - 1,550 mm, length from 4,300 to 10,800 mm and weight 15.5 to 32.0 tons. There are many kinds of slabs in the global market; depending on type of steel used such as low carbon, medium carbon, high carbon, or stainless, and each type has several grades. At present, low carbon is the primary production of SSI. The grade of slab used for rolling is dependent on the type of hot-roll sheet to meet the customer’s requirement.

Sources and Suppliers The Company imports all of slabs from abroad. Slab manufacturing countries are located in every part of the world such as China, CIS, South Korea, Japan, South America countries, European countries, and Australia. In 2015, the Company purchased Slabs from 6 manufacturers in 4 countries including United Kingdom, Japan, Indonesia, and Brazil. SSI purchases quarterly on the spot market through third party distributors without obligation to any specific company. The Company will notify the suppliers in advance of the demand for raw materials annually or quarterly. The agreement is based on the price in each period. The advance notice requirement enables the Company to reduce the risk of raw material shortage.


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Revenue Structure

017

Revenue Structure Product / Business Unit HRC Business

Operated by Sahaviriya Steel Industries Plc.

2015 Shareholding Revenue by SSI (Million % (%) Baht) -

19,612 1) 95.69

2014 (Restated) Revenue % (Million Baht) 32,382 1) 97.11

2013 Revenue % (Million Baht) 45,599 1) 69.20

Engineering Business West Coast Engineering Co., Ltd.

99.99

416

2.03

567

1.70

487

0.74

Port Business

51.00

145

0.71

144

0.43

169

0.26

Upstream Business Sahaviriya Steel Industries UK Ltd. 100.00

-

-

-

-

Other revenues

312 6 4 -

1.52 0.03 0.02 -

246 3 2 -

0.74 0.01 0.01 -

20,495 100.00 33,344

100.00

Prachuap Port Co., Ltd.

Sahaviriya Steel Industries Plc. Prachaup Port Co., Ltd. West Coast Engineering Co., Ltd. Sahaviriya Steel Industries UK Ltd.

19,132 2) 29.04 445 3 2 55 2)

0.68 0.00 0.00 0.08

65,892 2) 100.00

Including sales to Thai Cold Rolled Steel Sheet Plc. amounting to Baht 70 million, Baht 1,485 million, and Baht 2,569 million in 2015, 2014, and 2013 respectively. 2) Revenues in 2013 were before reclassification on a break-up basis. 1)


018

Steel Industry and Market Overview

Steel Industry and Market Overview

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

World Steel Industry in 2015 World Steel Association (“WSA�) reported an estimated figure of Global Apparent Steel Use of 1,513 million tons in 2015, an annual decrease of 1.7%. Global crude Steel Production in 2015 was approximately 1,599 million tons, an annual decrease of 2.9%. China contributed 50% of world crude steel production and maintained its position


Steel Industry and Market Overview

as the production leader, despite its 804 million tons output, an annual decrease of 2.3%. An annual decrease of 1.7% in Global Apparent Steel Use in 2015 was due to the slowdown of the global economy mainly impacted by the slowdown of Chinese economy, especially in real estate sector, leading to an annual decrease of 3.5% in China Apparent Steel Use in 2015. There was also a decrease in Apparent Steel Use in Russia, Brazil and USA. However, Apparent Steel Use in ASEAN, MENA, India and Mexico improved from the previous year. In term of steel prices in 2015, iron ore prices (CFR China) declined from the range of USD 52 - 72 per ton in Q1/2015 to the range of USD 48 - 67 per ton, USD 45 - 60 per ton and USD 37 - 56 per ton in Q2/2015, Q3/2015 and Q4/2015 respectively. Meanwhile, slab prices (CFR East Asia Import) continuously decreased from the range of USD 323 - 385 per ton in Q1/2015 to the range of USD 310 - 330 per ton, USD 270 - 310 per ton and USD 230 - 280 per ton in Q2/2015, Q3/2015 and Q4/2015 respectively. Likewise, HRC prices (FOB China) continuously decreased from the range of USD 368 - 458 per ton in Q1/2015 to the range of USD 339 - 375 per ton, USD 264 - 335 per ton and USD 253 - 280 per ton in Q2/2015, Q3/2015 and Q4/2015 respectively.

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

019

Thailand Steel Industry in 2015 Thailand steel industry in 2015 reported total Apparent Steel Supply of 16.7 million tons, an annual decrease of 3.5% (Source: Iron and Steel Institute of Thailand, ISIT). Flat steel consumption dropped by 5.2% YoY. Long steel consumption also dropped by 0.4% YoY, driven by a contraction of investment in private sector due to slower-than-expected recovery of economy.


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Steel Industry and Market Overview

020

In 2015, domestic steel production decreased by 4.4% YoY following the decline in domestic consumption. This was mainly resulted from the slighter-than-expected gross domestic product (GDP) growth in Thailand which expanded only 2.8% due to a contraction in export impacted by continuing global economic slowdown. Prevailing Trade Remedy Measures against imported hot-rolled flat steel sheet and cold-rolled flat steel sheet in Thailand are as follows: Products

Country of Origin

Measures

Duty Rate

Status 1)

Effective Period

China, Malaysia

Anti-dumping

23.57% - 42.51%

Final

12 Aug 2011 - 11 Aug 2016

HRC China Anti-dumping 14.28% - 19.47% (with Boron added)

Final

26 Dec 2012 - 25 Dec 2017

HRC

Final

22 May 2015 - 21 May 2020

HRC

Japan, South Africa, Russia, Anti-dumping 0% - 128.11% Kazakhstan, India, South Korea Taiwan, Venezuela, Argentina, Ukraine, Algeria, Indonesia, Slovakia, Romania

HRC (with other elements added)

All Safeguard (UN developing countries excluded, except Turkey)

41.67% Final 40.42% 39.21%

27 Feb 2016 - 26 Feb 2017 27 Feb 2017 - 26 Feb 2018 27 Feb 2018 - 26 Feb 2019

HRC (without other elements added; thickness 0.9 - 50 mm and width 600 - 3,048 mm)

All Safeguard (UN developing countries excluded except Brazil)

21.92% Final 21.52% 21.13%

24 Dec 2014 - 6 Jun 2015 7 Jun 2015 - 6 Jun 2016 7 Jun 2016 - 6 Jun 2017

CRC China, Vietnam, Taiwan Anti-dumping 4.22% - 20.11% Final 6 Feb 2014 - 5 Feb 2019 1) According to Thai regulations, the two stages of AD and Safeguard are Provisional and Final Measure. Provisional Measure may be imposed if there is clear evidence and a preliminary determination that increased imports have caused or are threatening to cause serious injury. After making the Final Determination that dumped imports are causing injury for AD or imports are causing serious injury for SG, the Final measures will be applied.


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Report of the Audit Committee for 2015

Report of the Audit Committee for 2015

The Board of Directors’ meeting No. 7/2014 held on 19 June 2014 reappointed the Audit Committee whose term expired for another three year term, from 30 June 2014 to 29 June 2017. In 2015, the Committee held 8 meetings and its members’ attendance were as follows:

Audit Committee members

1. Mr. Somchai Sakulsurarat 2. Mr. Permpoon Krairiksh 3. Mr. Yarnsak Manomaiphiboon 4. Mrs. Wannee Sirikanchana

The Committee performed the following duties:

021

Chairperson of the Audit Committee Audit Committee Member Audit Committee Member Secretary to the Audit Committee

Number of Meetings Attended/ Number of Meetings

8/8 6/8 7/8 7/8

1. Reviewed the Company’s 2015 interim and annual financial statements as well as its consolidated financial statements together with the external auditors and the management, and submitted them to the Board of Directors for approval before disclosure to the Stock Exchange of Thailand (SET) and the Securities and Exchange Commission (SEC). Acknowledged the auditor’s report on the Company’s financial statement for the year ended 31 December 2015, the auditor did not express an opinion on the financial statements due to 1) the limitation of review scope; 2) material uncertainty other than going concern; and 3) material uncertainty concerning going concern basis of accounting as well as acknowledged the Company’s financial status and operating performance with shareholders’ equity of less than zero, causing the Company for possible delisting. 2. Preliminary approved the change in accounting policy of the Company and its subsidiaries in Thailand, regarding the valuation of fixed assets for property, plant and equipment, from Revaluation Basis to Cost Basis starting from 1 January 2016 onward. 3. Approved the Group Internal Audit master plan, the annual audit plan as well as acknowledged the internal audit reports regarding internal control.


022

Report of the Audit Committee for 2015

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

4. Reviewed the adequacy of the internal control system of the Company against self-evaluation forms issued by the SEC and by the external auditors. Acknowledged the report of the internal control system of the Company’s subsidiaries in Thailand. Approved the retirement of the former Chief of Group Internal Audit office who also served as secretary to the Audit Committee and approved the appointment of a replacement. 5. Acknowledged reports from Group Legal Office on corporate compliance with laws pertaining to the Securities and Exchange Act as well as other laws concerning the Company’s businesses, and monitored progress in litigations involving the Company. 6. Acknowledged reports from the auditors that there were no issues to be presented to the Audit Committee according to section 89/25 of the Securities and Exchange Act. 7. Held a special meeting to discuss on protecting the interest of minority shareholders regarding the Company’s financial crisis stemmed from a temporary suspension of SSI UK’s slab production and the loan default of SSI UK which the Company was its guarantor and provided the conclusions and recommendations to the Board of Directors. 8. Reviewed the quarterly Major Risk Management Report prepared by the Risk Management Committee as well as acknowledged the annual anti-corruption risk assessment. 9. Reviewed the annual Risk Management System and its guidelines provided by the Risk Management Committee. 10. Considered, selected, and proposed the appointment of Miss Orawan Chunhakitpaisan or Mr. Charoen Phosamritlert or Mr. Sakda Kaothanthong of KPMG Phoomchai Audit Limited as auditors of the Company for the fiscal year 2016 including the audit fee. 11. Ensured the transactions between the Company and its related companies complying with the Securities and Exchange laws and laws concerning the Company’s businesses and followed up on accounts receivable/accounts payable report of the related companies. 12. Acknowledged reports from the Company Secretary to ensure compliance of conflicts of interest transactions as specified in the Company’s policies and procedures, as requested by the SEC. 13. Considered the delegation of responsibility to the senior management, for managing and monitoring of overdue debt collection from related companies. 14. Considered and proposed to the Board of Directors for their authorisation for the Company to submit the completed Self-Evaluation Tool for Countering Bribery to the Private Sector Collective Action Coalition Against Corruption Council (CAC) for entering the certification process. On 27 January 2016, the Company acknowledged the CAC Committee’s resolution that the Company has already passed the certification process and became a member of CAC. 15. Reviewed the Company’s Audit Committee charter (3rd edition). 16. Carried out the Audit Committee’s self-assessment for 2015 and submitted it to the Board of Directors. 17. Reviewed the information disclosed to the SET and the SEC in the 2015 Company annual report (Form 56-2) and the annual information disclosure form ended 31 December 2015 (Form 56-1). 18. Reported the Audit Committee’s activities for the year 2015 to the Board of Directors.


Report of the Audit Committee for 2015

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

023

The Audit Committee has independently carried out its duties and responsibilities delegated by the Board of Directors and taken into account the transparency of its view, the Audit Committee was of the opinion that: 1. The annual financial statements of the Company in 2015 are presented fairly, in all material respects, in accordance with generally accepted accounting principles. 2. The Company has suitable and efficient internal control and internal audit systems. The former Chief of Group Internal Audit office who was in charge in 2015 and her replacement have sufficient knowledge and competent needed to perform their duties. 3. The Company has complied with relevant laws and regulations. The Company has disclosed accurate and complete information in a timely manner to its shareholders and investors via the SET and the SEC. 4. The Audit Committee concurred with reports provided by the Risk Management Committee and gave some additional recommendations. The Company has an appropriate Risk Management System in place. 5. The selection of the external auditors and the audit fee is appropriate to be proposed to the Board of Directors before submitting to the Annual General Meeting of Shareholders No. 27 or an interim executive or a Plan Preparer or a Plan Administrator, depending upon the Company’s situation at that time for further approval.

Mr. Somchai Sakulsurarat

Chairperson of the Audit Committee 11 February 2016


024

Report of the Risk Management Committee for 2015

Report of the Risk Management Committee for 2015

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

1. The Risk Management Committee (the “Committee”) was established by the Board of Directors (the “Board”) on 3 December 2007 for the purpose of assisting the Board in oversight of the Company’s risk management. The Committee shall comprise of at least three Board members appointed by the Board, and the Vice President in charge of finance and accounting shall act as the secretary to the Committee. The current Committee serves a term of three years from 4 December 2013 to 3 December 2016. Members of the Committee are now listed as follows: 1. Dr. Tongchat Hongladaromp Chairman of the Risk Management Committee 2. Mr. Somchai Pipitvijitkorn Risk Management Committee Member 3. Mr. Permpoon Krairiksh Risk Management Committee Member

2. 2.1 The Committee is in charge of the responsibility of overseeing the Company’s management of key risks. To perform its duties, the Committee regularly reviewed risk management reports in order to monitor the effectiveness of the management of the Company’s risk exposures. The Committee also advised the Board on risk management policy and strategy as well as expressing its thought on the problems and obstacles encountered in the development of the Company’s risk management system to assist the Board in oversight of the Company’s enterprise risk management. During the year 2015, the Committee reviewed and provided recommendation to management in the quarterly Risk Management Committee meeting and assessed risk factors, risk management plans and the appropriate magnitude of the risk to ensure the systematic implementation of risk management process in order to be prepared for any contingency that might occur and have impacts on the Company. 2.2 For SSI, the major risks of the Company are market risk and financial risk. The Committee considered risk management reports and provided comment about the market risks which had an impact from the imported goods and price competition in the world market. To mitigate the risk, the Company changed its strategies on sale and raw material management as well as monitoring other impacts which might have on the Company’s performance. As for financial risks, the Committee provided suggestions on the commercial debt and loan analysis to ensure the efficiency of debt management as well as proposing the capital increase in order to solve the financial problem, as the Company could not expect the soon recovery amidst the fluctuating market and the current sluggish economy. 2.3 In addition, during the year 2015, the Committee reviewed key risks and closely monitored the situation of Sahaviriya Steel Industries UK Limited (SSI UK), the Company’s affiliate, incorporated in the United Kingdom, which operates Upstream Business producing steel slabs. As proposed by the SSI UK’s representatives, the followings were the major risk exposures associated with the operations of SSI UK. Market Risk, there was a continuous decrease of product prices with high uncertainty. Manufacturing risk, there are several factors difficult to control including machinery operation and maintenance machine which affected the financial status. The Committee continually focused and made recommendations on liquidity shortfall. However, SSI UK filed a petition for liquidation to the High Court of Justice Chancery Division Manchester District on 2 October 2015, and the court accepted the petition on the same day. 2.4 The Committee acknowledged the risk of entering the rehabilitation process and the situation of the Company during late 2015. The Committee provided comments to the management on liquidity and foreign exchange rate risks which had a big impact from submitting the petition for Business Rehabilitation and falling into the limitation of the “Automatic Stay” provision.

Dr. Tongchat Hongladaromp

Chairman of the Risk Management Committee 3 February 2016


Risk Factors

Risk Factors

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

025

In 2015, due to both internal factors and external factors, the Company had major changes that affected the operations and structure of the organisation. These included the plant shutdown and business closure of Sahaviriya Steel Industries UK Limited (SSI UK). Indeed, the Company is aware of the risks and risk factors that affect the Company. The Company has Risk Management Committee (RMC) who helps the Board of Directors to oversee risk management tasks by monitoring and


026

Risk Factors

evaluating key risks. In addition, the Company has Audit Committee (AC) who reviews the adequacy of risk management system. Throughout 2015, the Company had reviewed and assessed risk factors as well as setting control measures to mitigate risks on a quarterly basis. The major risks and key risk management measures of the Company in 2015 can be summarised as follows:

Market Risk • Risk from Fluctuation of Prices and Steel Product Demand Fluctuation of prices and steel demand is a risk that may affect the Company’s performance and causes the Company’s inability to achieve its objectives. The fluctuation is a result of direct and indirect changes in economic, social, and competition factors, as well as other changes occurring domestically and overseas. The Company summarised major risk factors that related to product prices, sales quantity, and metal spread as follows: 1. Demand side: domestic and overseas economic factors as well as domestic situation throughout the year have significantly impacted product demand causing the Company’s incapability to deliver the shipment volume and price as planned.

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

2. Supply side: domestic sales volume from imported products and domestic competitors may affect the Company’s sales volume. In addition, the trade policy of the government may affect the volume of dumping imported hot roll coils from overseas. 3. Other factors: such as government’s trade policy, foreign exchange rate, interest, transportation cost, etc. In response to the fluctuation of prices and steel demand as well as changes in the Company’s situation mentioned above, the Company emphasised on the market and innovation to generate income and add value to its products. Measures to mitigate the risks include the following: 1. Carefully manage the raw material procurement concerning the raw material price that will make the Company satisfied with the required spread between the selling price and the raw material price given an expected sales volume. The Company also sourced new slab suppliers as replacement of SSI UK which no longer operated, to maintain suitable and predictable cost and quantity. In a normal course of business, it is necessary for the Company to maintain inventories of raw materials and finished goods in an appropriate quantity to enhance sales and production to run efficiently as well as reduce price volatility and carrying cost especially an interest expense. 2. Focus on premium value products with value added and lower price fluctuation. 3. Closely monitor domestic and overseas markets in order to analyse and consider product sales to well respond to the order and import of slabs from foreign countries as well as for searching more raw material sources in order to obtain raw materials with high quality, low cost, adequate quantity and short delivery time. 4. Control a proper level of inventories for both slabs and finished goods to meet sales projection and reduce raw material and inventory turnover period for the purpose of risk mitigation of negative price effect. 5. Ensure that the production plan meets the sales plan and shorten delivery time of finished products. 6. Closely monitor on dumping situation of imported products and the government’s price control policy in order to take proper and timely actions.


Risk Factors

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

027

Financial Risk • Exchange Rate Risk In the fourth quarter 2015, after submitting the petition of Business Rehabilitation and being in moratorium period, the Company has been exposed to risks from fluctuations in foreign currency exchange rates. This was because credit limit on the forward exchange contracts used to mitigate the risk from fluctuations in foreign currency exchange rates has been suspended. However, after the Central Bankruptcy Court (“Court”) issued an order of the Company’s Business Rehabilitation on 10 March 2016, the liabilities denominated in foreign currencies would be converted into Thai Baht. The Company, then, may be able to reacquire the credit limit on foreign currency forward contracts. As a result, the risk of fluctuations in foreign currency exchange rates will be reduced. • Trade Credit Risk Trade credit risk is the risk incurred from inability of counterparties of the Company to satisfy the terms and conditions stated in the sale and purchase agreement, thus the payment is not made on the due date. This may result in a negative impact on the Company. The Company has concentrated on the quality of trade credit by conducting efficient control of credit collection, implementing suitable internal control, having a strict credit policy and reviewing credit allowance and credit granted authority. This is to ensure that the trade credit standard has been followed consistently and to limit level of risk from non generated income trading credit to be at the level that has not affected the Company’s performance. • Liquidity Risk A significant risk factor that had impact on the Company’s liquidity in 2015 was lower-than-projected cash inflows which was a result of the continuation in slump selling price, the inability of trade debtors to repay the debt on schedule, as well as the dumping of imported hot roll coil. In addition, SSI UK, a subsidiary of the Company and a manufacturer of steel slabs in the UK, has stopped its production and closed down the business. The Company which secured a huge loan of SSI UK, then, had to bear such loan, resulting in negative impact on financial situation and liquidity of the Company.

The Company submitted a petition for Business Rehabilitation to the Central Bankruptcy Court (the Court) on 1 October 2015, the same day on which the accepted the petition. Since then, creditors of the Company had been forced by law to stop their actions to enforce the rights that exist under civil law against the Company. During that time, to mitigate the liquidity risk, the Company has closely monitored its cash flow, reorganisation, as well as focusing on sales and innovation in order to generate income and add value to its products. Moreover, it also rigorously conducts cost reduction in production and reduces other expenses. The Company has prepared its debt restructures, and provided close cooperation with lenders and financial advisors to ensure its readiness to enter the rehabilitation process and ability to go through successfully.

Production Risk • Production Process and Technology Risk In production of hot-rolled coils, the Company is exposed to the risk of production incurred from machinery, production process and production technology. Key risks related to the production process and technology include risks of major machinery damage from normal use, improper production process resulting in the products that are unable to meet the customer requirements or inability to produce some grade of products, significant yield loss in production, and unusable machinery due to obsolete part. These may affect hot-rolled coil production or may lead to production


028

Risk Factors

suspension which will further impact product delivery to customers. To prevent the production risks, the Company has determined the procedures to improve the production process for problem solving and risk management, conducted the inventory management plan to maintain spare parts to be ready for use at all times and acquired new technologies for production to enhance the quality control efficiency and accuracy by installing the Surface Inspection System. The Surface Inspection System facilitates real-time decision making which will enable a prompt reaction on unqualified products leading to significant reduction of inferior goods. The Company has also obtained an automatic system to be used in product quality management to accommodate the ability to meet the customer requirements, reduce human errors and improve

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

product quality consistency. Moreover, the Company has encouraged setting up a working group for the development of production process aiming to figure out solutions for particular problems. The working group is responsible for analysis, improvement planning and implementation of existing and new projects to increase efficiency and reduce production cost as well as improve product quality. The projects are as follows: 1. Zero Scrap Project, 2. Furnace Temperature Reduction Project, 3. Reduction in Work-roll Consumption of Finishing Mill Stands project, 4. In-house maintenance of Edge Induction Heater project, 5. Pinch roll Force & Position Hybrid control project, 6. Self Revamping and Migration Alpha Server to Itanium Server for Process control project, and 7. Increase productivity of pickling and oiling process project.

Risk from Natural Disaster, Fire and other Emergency Incidents Natural Disaster Regarding risk from the event of windstorm, flood and fire that may cause an opportunity loss in production and delivery of goods, the Company has managed to mitigate the risk by establishing a working group and prepare its personnel and equipment to be ready for the emergency incidents. Moreover, The Company also has insurance covering property damage, damage on goods and products caused by such incidents as well as loss from business interruption in case of fire or natural disaster. There was an incident of fire at empty oil tank in 2015, but it did not affect the production process or life of employees. The Company’s emergency measures were able to control the spread of fire.

Risk from Impacts of Production on Environment, Society and Community The Company has evaluated risk from impacts of production on environment, society and community in all aspects to cover the risk possibly incurred in the area of environment, resource utilisation, living and society, safety and economy of the community. In order to reduce impacts possibly occurred from the Company’s production to the external community, the Company has operated under the Environmental Standard


Risk Factors

ISO14001 : 2004 and continually monitored changes in environmental laws. In addition, the Company has utilised fuel oil with not over 2% sulfur, controlled and inspected the fuel system to ensure the complete combustion, controlled and inspected the water and air treatment equipment to be always ready for use, reused treated water without releasing wastewater to outside area, ensured the result of water and air quality complying with the standard imposed by the government agencies, evaluated the waste management companies and used the service of the waste management companies approved by the Department of Industrial Works. Moreover, practices of emergency response plan have also been implemented to relieve impacts from possible emergency situations. The Company has established the Sahaviriya Transportation Control Working Committee monitored by The Community Leaders Council, as well as activities to promote the prevention of accidents possibly occurred from transportation of goods, e.g., driver training, CCTV installation to monitor driving through community area.

Risk from Investment in SSI Securities • Risk from the Unsuccessful Business Rehabilitation or the Delayed Rehabilitation Process Causing Damage to the Business Since submitting a petition for Business Rehabilitation to the Court on 1 October 2015, the Company has currently been in the process of Business Rehabilitation under the Bankruptcy Act, ordered by the Court on 10 March 2015. As a result, the statutory rights of shareholders are suspended except the right to receive dividends. However, the Business Rehabilitation, at any stage, may be objected by creditors or denied by the Court. If occurs, it may lead to a delayed or unsuccessful rehabilitation. Moreover, the Company’s creditors are eligible to file bankruptcy against the Company as the Court protection under Section 90/12 regarding Automatic Stay of the Bankruptcy Act would no longer exist if the Court revokes the rehabilitation order. To mitigate the risk, the Company has established a working group for Business Rehabilitation and debt restructuring, which works closely with Weerawong Chinnavat and Peangpanor Ltd., Baker Tilly Corporate Advisory Services (Thailand) Limited and National Advisory Company Limited (the Company’s legal counsel and

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

029

financial advisors), who help assist the Company for entering the rehabilitation process, preparing the Rehabilitation Plan (the Plan) and offering the Plan to the creditor’s meeting for approval before seeking for Court approval, as well as implementing the Plan till it is successful. • Risk from Being Possibly Delisted as the Listed Securities from The Stock Exchange of Thailand As the Company’s financial statements for the year ended 31 December 2015, audited by an independent auditor, showed negative shareholders’ equity, the Company is subject to possible delisting unless the Company is able to solve its financial status and operations within time provided, in compliance with SET regulations. The Company’s guidelines for risk management is submitting a petition for the Company’s Business Rehabilitation to the Court and asking the Court to appoint the Company, as a debtor, to be a Plan Preparer. Subsequently, on 10 March 2016, the Court issued an order for the Company’s Business Rehabilitation and appointed the Company as a Plan Preparer. The Company is committed to prepare the Plan on the principle of fairness to all interested parties with regard to the achievability. The Company will then submit the Plan to the Official Receiver within time in accordance with the law, in order that the Creditors’ Meeting passes the resolution accepting the Plan, and the Plan will be proposed to the Court for its consideration and approval accordingly.


030

General Information and Other Key Information

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

General Information and Other Key Information

Location Head Office: 28/1 Prapawit Building, 2nd - 3rd Floor, Surasak Road, Silom, Bangrak, Bangkok 10500 Tel.: 0-2238-3063-82 Fax: 0-2236-8890, 0-2236-8892 Plant Office: 9 Moo 7, Ban Klang Na - Yai Ploy Road, Mae Ramphueng, Bangsaphan, Prachuap Khiri Khan 77140 Tel.: 0-3269-1403-5, 0-3269-1412-5, 0-3269-1419-20 Fax: 0-3269-1416, 0-3269-1421

Name Abbreviation Company Registration No. Website Type of Business

: Sahaviriya Steel Industries Public Company Limited : SSI : 0107537000688

: www.ssi-steel.com : The Company manufactures and distributes hot-rolled coils with a maximum production capacity of 4 million tons per annum and hot-rolled coils pickled and oiled with maximum production capacity of 1 million tons per annum. The Company endeavors to supply premium-grade steel sheets to cater to the region’s growing demand in automobile, energy, transportation, and construction sector. In the downstream industry, the Company has investments in Cold Rolled Coil Business under operation of Thai Cold Rolled Steel Sheet Public Company Limited (TCRSS) and Coated Steel Sheet Business under operation of Thai Coated Steel Sheet Company Limited (TCS). In addition, the Company also has investments in related businesses including Engineering Business under operation of West Coast Engineering Company Limited (WCE) and Port Business under operation of Prachuap Port Company Limited (PPC). Type and Number : Registered Capital 50,263,663,124 Baht of Shares Ordinary Shares 50,263,663,124 Shares (As of Par Value 1 Baht per Share 31 December 2015) Paid-up Capital 32,166,262,124 Baht Ordinary Shares 32,166,262,124 Shares Par Value 1 Baht per Share


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

General Information and Other Key Information

031

Name, Head Office Location, Type of Business, and Number of Paid-up Shares of Companies in which Shareholding by the Company is More Than 10% of Paid-up Shares as at 31 December 2015 Name and Head Office Location

Type of Business

Registered Capital (Baht)

West Coast Engineering Company Limited Engineering 75,000,000 Business 1st Floor, Prapawit Building, 28/1 Surasak Road, Silom, Bangrak, Bangkok 10500 Tel.: 0-2237-6746-9 Fax: 0-2630-0516 Prachuap Port Company Limited Port Business 400,000,000 th 6 Floor, Prapawit Building, 28/1 Surasak Road, Silom, Bangrak, Bangkok 10500 Tel.: 0-2630-0323-32 Fax: 0-2236-7046, 0-2236-7057 Thai Cold Rolled Steel Sheet CRC Business 4,816,350,000 Public Company Limited 5th Floor, Prapawit Building, 28/1 Surasak Road, Silom, Bangrak, Bangkok 10500 Tel.: 0-2630-0300 Fax: 0-2630-0320-2

Par Value (Baht)

Number of Paid-up Shareholding Ordinary (%) Shares (Shares)

10

7,500,000

99.99

10

40,000,000

51

4.50

1,070,300,000

35.19


032

General Information and Other Key Information

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Name and Location of Other References Share Registrar Ordinary Shares : Thailand Securities Depository Co., Ltd. 93 Ratchadapisek Road, Din Daeng, Bangkok 10400 Tel.: 0-2009-9000 Fax: 0-2009-9991 TSD Call Center: 0-2009-9999 Auditors : Miss Sureerat Thongarunsang C.P.A. Registration No. 4409 Mr. Winid Silamongkol C.P.A. Registration No. 3378 Mr. Charoen Phosamritlert C.P.A. Registration No. 4068 Mr. Orawan Chunhakitpaisan C.P.A. Registration No. 6105 KPMG Phoomchai Audit Limited Empire Tower, 50th - 51st Floors, 195 South Sathorn Road, Bangkok 10120 Tel.: 0-2677-2000 Fax: 0-2677-2222 Corporate : Mr. Surasak Ngamsidhiphongsa Assistant Vice President - Corporate Secretariat Office Tel.: 0-2238-3063-82 Fax: 0-2236-8892 E-mail: surasakn@ssi-steel.com


Major Shareholders

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Major Shareholders List of Major Shareholders 1. SAHAVIRIYA GROUP 2. VANOMET HOLDING AG 3. JFE STEEL CORPORATION 4. MARUBENI-ITOCHU STEEL INC. 5. MR. KOMOL JUNGRUNGRUENGKIT 6. MR. WANCHAI OPASEAMKAJORN 7. THE BANK OF NEW YORK (NOMINEES) LIMITED A/C 5100 8. THAI NVDR COMPANY LIMITED 9. MR. VIROJ UNGPAIBOON 10. MR. PICHAI WICHAKKHAPAN THAI SHAREHOLDERS FOREIGN SHAREHOLDERS

033

Listed are the names and shareholding of the ten largest shareholders (as per article 258, voted the same way) on the latest closing date of the shareholder register book as of 29 March 2016. As of 29 March 2016 Number of Shares Percentage of Shareholding 6,778,496,219 21.07 5,326,567,253 16.56 1,133,908,088 3.53 1,133,908,088 3.53 834,125,900 2.59 500,000,000 1.55 443,709,240 1.38 418,753,033 1.30 412,000,700 1.28 296,784,000 0.92 23,284,324,766 shares 8,881,937,358 shares

Note: Sahaviriya Group consists of: Percentage of Shareholding 1. Sahaviriya Group Corporation Limited 14.35% is an investment holding company whose major shareholders are: (1) Mr. Win Viriyaprapaikit, who owns 47.15% of all shares (2) Mrs. Theerarat Kunattanonda, who owns 30.91% of all shares (3) Mr. Piya Viriyaprapaikit, who owns 20.95% of all shares (4) Others who own 0.99% of all shares 2. Sahaviriya Inter Steel Holdings Company Limited 4.85% (formerly named SSV ASSET Company Limited) is an investment holding company whose major shareholders are: (1) Sahaviriya Group Corporation Limited, who owns 97.89% of all shares (2) KP Capital Company Limited, who owns 1.93% of all shares (3) Others who own 0.18% of all shares 3. Mrs. Sirikul Viriyaprapaikit Bendi 1.13% 4. Ms. Kanokvalee Viriyaprapaikit 0.47% 5. Mrs. Krisna Viriyaprapaikit 0.19% 6. Mrs. Theerarat Kunatthanonda 0.08% 7. Mrs. Prapa Viriyaprapaikit 100 shares 8. Mr. Wit Viriyaprapaikit 100 shares Total shareholding in SSI 21.07%

Foreign Limit The Company’s foreign shareholding was limited at 49% of the paid-up capital. As of 29 March 2016, the Company’s foreign shareholding was 27.61% of the paid-up capital.


034

Dividend Policy

Dividend Policy

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

The Company has a policy to pay dividend at a rate of not less than 25% of net profit after income tax, legal reserve, and other reserves, from the Company’s separated financial statements in each year. Dividend payment; nonetheless, depends on economic conditions, operating profit, investment plans, covenant in various contracts, and other appropriated factors, both at present and in the future. According to the Board of Directors’ resolution on the dividend payment, the shareholders’ meeting shall approve dividend payment unless there is an interim dividend payment in which the Board of Directors is authorised to approve interim dividend payment. In this case, such payment should be submitted to the next meeting of shareholders for acknowledgement.

As for the dividend policy of the Company’s subsidiaries, the Company does not fix any particular rates of dividend payment. It depends on the operational results of each subsidiary, and the Board of Directors of that subsidiary will make the decision concerning dividends on a case-by-case basis. In 2015, the 26th Annual General Meeting of Shareholders held on 20 April 2015 considered and approved that no dividend payment shall be made for the operating results of the year 2014, as the Company had retained deficit as at 31 December 2014. Therefore, the Company was unable to allocate dividend payment to shareholders.


The Board of Directors

The Board of Directors

1. Mr. Wit Viriyaprapaikit

Chairman of the Board of Directors Age 80 years

Family Relationship with Other Directors: Father of Mr. Win Viriyaprapaikit Servicing Period: 21 years 11 months (from 21 January 1994 to 31 December 2015) % of Shareholding: 0.00000031% (100 shares) Education: Honorary B.A., Rajamangala Institute of Technology Director Training Programs: - None -

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

035

Work Experience: 2008 - 2012 • Chairman of the Board of Directors, Thai Cold Rolled Steel Sheet Public Company Limited 1995 - 2010 • Director, Bangpakong Lighter Company Limited • Director, Bangpakong Port Company Limited 1994 - 2010 • Chairman of the Board of Directors, Bangsaphan Barmill Public Company Limited 1990 - 2010 • Director, Thai Coated Steel Sheet Company Limited • Director, Prachuap Port Company Limited 1990 - 2003 • Director and Chairman of the Board of Executive Directors, Thai Cold Rolled Steel Sheet Public Company Limited 1982 - 2000 • Director, SVOA Public Company Limited 1982 - 1998 • Director, Bank of Ayudhya Public Company Limited Current Position in Other Organisations: In listed companies: - None In non-listed companies: • Director, Sahaviriya Group Corporation Limited • Director, Sahaviriya Inter Steel Holdings Company Limited • Director, Sahaviriya Iron and Steel Company Limited In other organisations that may cause any conflict of interest to the Company: • Director, Sahaviriya Plate Mill Public Company Limited • Director, B.S. Metal Company Limited • Director, Prapawit Building Property Company Limited • Director, Sahaviriya Panich Corporation Limited • Director, Western Housing Company Limited Meeting Attendance in 2015: 1. The Board of Directors’ Meeting 2. The Shareholders’ Meeting in 2015

18/18 times 1/1 time


036

The Board of Directors

Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent. Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None -

2. Mr. Somchai Sakulsurarat

Deputy Chairman of the Board of Directors, Independent Director and Chairman of the Audit Committee Age 67 years

Family Relationship with Other Directors: - None Servicing Period: 5 years and 10 months (from 26 February 2010 to 31 December 2015) % of Shareholding: - None Education: • M.B.A., Sasin Graduate Institute of Business Administration, Chulalongkorn University • Bachelor of Economics (English Program), Thammasat University • The Joint State-Private Sectors Regular Course, National Defense College • Certificate of Financial and Banking, Associateship Diploma of the Institute of Bankers, London • Advance Certificate Course in Public Administration and Law for Executives, King Prajadhipok’s Institute

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Director Training Programs: • Director Certification Program (DCP 80/2006), Thai Institute of Directors Association Work Experience: • Director and Chairman of Audit Committee, Globlex Holding Management Public Company Limited • Chairman of the Board of Directors, Thai Agro Exchange Company Limited • Advisor of Deputy Minister of Finance (Mr. Pradit Phattharaprasit) • The Senate, the National Legislative Assembly of Thailand • Chief Executive Officer, Thai Military Bank Public Company Limited • Chief Executive Officer, Bangkok Metropolitan Bank Public Company Limited • President, Bank of Ayudhya Public Company Limited Current Position in Other Organisations: In listed companies: • Chairman of the Board of Directors and Chairman of the Nomination and Remuneration Committee, Chumporn Palm Oil Industry Public Company Limited • Chairman of the Board of Directors, S. Khonkaen Food Public Company Limited In non-listed companies: • Chairman of the Board of Directors, Prachuap Port Company Limited • Director, West Coast Engineering Company Limited • Director, Lenso Corporation Public Company Limited • Chairman of the Board of Directors, SCJ & Associates Company Limited In other organisations that may cause any conflict of interest to the Company: - None Meeting Attendance in 2015: 1. The Board of Directors’ Meeting 2. The Independent Directors’ Meeting 3. The Audit Committee Meeting 4. The Shareholders’ Meeting in 2015

17/18 4/4 8/8 1/1

times times times time

Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent.


The Board of Directors

Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None Additional Information on Holding Independent Directors Status: 1. Not being related to management, major shareholder of the Company or its subsidiaries 2. Not being related to the Company, its subsidiaries, its associated companies, or a juristic entity that may have conflict of interest at present or the past 2 years • Not being director in roles of management, employees, or advisor who receives full time salary • Not providing professional service (i.e. auditor or legal counsel) • Not having significant business relationship with the Company in the manner that may interfere with the independent judgment

3. Mr. Tongchat Hongladaromp

Director, Independent Director and Chairman of the Risk Management Committee Age 77 years

Family Relationship with Other Directors: - None Servicing Period: 21 years and 10 months (from 1 March 1994 to 31 December 2015) % of Shareholding: - None -

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Education: • Ph.D.Eng.(Civil), Northwestern University, U.S.A. • M.Eng. (Civil), Asian Institute of Technology • B.Eng. (Civil), Chulalongkorn University • The National Defense Regular Course (Class 32), National Defense College Director Training Programs: • Director Accreditation Program (DAP 36/2005), Thai Institute of Directors Association • Finance for Non-Finance Director 24/2005 (FND 24/2005), Thai Institute of Directors Association Work Experience: 2005 - 2012 • Director, Asian Institute of Technology 2004 - 2010 • Independent Director, Bangkok Polyethylene Public Company Limited 2006 - 2008 • Director, PTT Exploration and Production Public Company Limited 2003 - 2008 • Director, PTT Chemical Public Company Limited 1997 - 2008 • Chairman of the Board of Directors, TMB Asset Management Company Limited 2001 - 2003 • President, Thai Petrochemical Industry Public Company Limited 1996 - 2001 • President, Thai Telephone & Telecommunication Public Company Limited 1987 - 1991 • President, PTT Exploration and Production Public Company Limited 1979 - 1987 • Governor, Petroleum Authority of Thailand 1976 - 1979 • Governor, Expressway and Rapid Transit Authority of Thailand Current Position in Other Organisations: In listed companies: • Chairman of the Board of Directors, Samart Corporation Public Company Limited In non-listed companies: • Director, West Coast Engineering Company Limited • Chairman of the Board of Directors, Linde (Thailand) Public Company Limited • Chairman of the Board of Directors, C.T. Land Company Limited

037


038

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

The Board of Directors

• Chairman of the Board of Directors, Chuchawal-Royal Haskoning Company Limited • Director, Thai Light Block & Panel Company Limited • President of the University Council, King Mongkut’s University of Technology Thonburi In other organisations that may cause any conflict of interest to the Company: - None -

4. Mr. Siripol Yodmuangcharoen

Meeting Attendance in 2015: 1. The Board of Directors’ Meeting 11/18 times 2. The Independent Directors’ Meeting 2/4 times 3. The Risk Management Committee Meeting 4/4 times 4. The Shareholders’ Meeting in 2015 0/1 time

Servicing Period: 5 years and 8 months (from 30 April 2010 to 31 December 2015)

Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent.

Education: • D.B.A., University of South Australia, Australia • M.B.A., Thammasat University • B.A. Economics, Thammasat University • The National Defense Regular Course, National Defense College • Top Executive Program in Commerce and Trade (TEPCoT 1) • Certificate, The Civil Service Commission (CSC 17)

Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None Additional Information on Holding Independent Directors Status: 1. Not being related to management, major shareholder of the Company or its subsidiaries 2. Not being related to the Company, its subsidiaries, its associated companies, or a juristic entity that may have conflict of interest at present or the past 2 years • Not being director in roles of management, employees, or advisor who receives full time salary • Not providing professional service (i.e. auditor or legal counsel) • Not having significant business relationship with the Company in the manner that may interfere with the independent judgment

Director, Independent Director, and Chairman of the Nomination and Remuneration Committee Age 67 years

Family Relationship with Other Directors: - None -

% of Shareholding: - None -

Director Training Programs: • Director Certification Program (DCP 131/2010), Thai Institute of Directors Association • Capital Market Academy Leadership Program (CMA 7), Capital Market Academy Work Experience: 2012 - 2013 • Director, CAT Telecom Public Company Limited • Director, Thailand Institute of Scientific and Technological Research 2011 - 2013 • Director and Chairman of the Board of Executive Directors/ Chairman of the Audit Committee, Thai Credit Guarantee Corporation (TCG) 2010 - 2011 • Director and Chairman of the Risk Management Committee, Government Housing Bank 2009 - 2010 • Director, Siam City Bank Public Company Limited


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

The Board of Directors

2007 - 2009 • Commission Member, Securities and Exchange Commission • Director, Office of Insurance Commission • Commission Members, The Office of the Agricultural Futures Trading Commission • Permanent Secretary, Ministry of Commerce 2003 - 2009 • Chairman of the Executive Board, The Office of the Agricultural Futures Trading Commission 2005 - 2008 • Director, Government Savings Bank 2001 - 2007 • Director General Department of Internal Trade, Ministry of Commerce

Current Position in Other Organisations: In listed companies: • Independent Director, Thai President Foods Public Company Limited • Director and Chairman of the Risk Management Committee, Siam Food Products Public Company Limited In non-listed companies: • Vice Chairman of the Board of Directors, Plantheon Company Limited • Chairman of the Board of Executive Directors, The Gem and Jewelry Institute of Thailand (Public Organization) • Public Sector Development Commission OPDC, Office of the Public Sector Development Commission In other organisations that may cause any conflict of interest to the Company: - None Meeting Attendance in 2015: 1. The Board of Directors’ Meeting 2. The Independent Directors’ Meeting 3. The Nomination and Remuneration Committee Meeting 4. The Shareholders’ Meeting in 2015

7/18 times 2/4 times 3/3 times 0/1 time

Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent.

039

Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None Additional Information on Holding Independent Directors Status: 1. Not being related to management, major shareholder of the Company or its subsidiaries 2. Not being related to the Company, its subsidiaries, its associated companies, or a juristic entity that may have conflict of interest at present or the past 2 years • Not being director in roles of management, employees, or advisor who receives full time salary • Not providing professional service (i.e. auditor or legal counsel) • Not having significant business relationship with the Company in the manner that may interfere with the independent judgment

5. Mr. Permpoon Krairiksh

Director, Independent Director, Audit Committee Member and Risk Management Committee Member Age 64 years

Family Relationship with Other Directors: - None Servicing Period: 15 years and 1 month (from 8 December 1999 to 31 December 2015) % of Shareholding: - None -


040

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

The Board of Directors

Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None Additional Information on Holding Independent Directors Status: 1. Not being related to management, major shareholder of the Company or its subsidiaries 2. Not being related to the Company, its subsidiaries, its associated companies, or a juristic entity that may have conflict of interest at present or the past 2 years • Not being director in roles of management, employees, or advisor who receives full time salary • Not providing professional service (i.e. auditor or legal counsel) • Not having significant business relationship with the Company in the manner that may interfere with the independent judgment

6. Mr. Pichai Eursirisub

Director, Independent Director and Good Corporate Governance Committee Member Age 57 years

Family Relationship with Other Directors: - None Servicing Period: 2 years 10 months (from 1 March 2013 to 31 December 2015) % of Shareholding: 0.198% (63,640,600 Shares)


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

The Board of Directors

Education: • Commerce, Bangkok Business College Director Training Programs: - None Work Experience: - None Current Position in Other Organisations: In listed companies: - None In non-listed companies: • Business Owner and President, Kim Heng Seng Steel Company Limited In other organisations that may cause any conflict of interest to the Company: - None Meeting Attendance in 2015: 1. The Board of Directors’ Meeting 2. The Independent Directors’ Meeting 3. The Good Corporate Governance Committee Meeting 4. The Shareholders’ Meeting in 2015

17/18 times 4/4 times 4/4 times 1/1 time

Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent. Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None -

041

Additional Information on Holding Independent Directors Status: 1. Not being related to management, major shareholder of the Company or its subsidiaries 2. Not being related to the Company, its subsidiaries, its associated companies, or a juristic entity that may have conflict of interest at present or the past 2 years • Not being director in roles of management, employees, or advisor who receives full time salary • Not providing professional service (i.e. auditor or legal counsel) • Not having significant business relationship with the Company in the manner that may interfere with the independent judgment

7. Mr. Yarnsak Manomaiphiboon

Director, Independent Director, Audit Committee Member and Good Corporate Governance Committee Member Age 52 years

Family Relationship with Other Directors: - None -

Servicing Period: 3 years and 10 months (from 27 February 2012 to 31 December 2015) % of Shareholding: - None Education: • M.B.A., Indiana University, Bloomington, U.S.A. • Bachelor Degree in Engineering (2nd Class Hons.), Chulalongkorn University Director Training Programs: • Director Certification Program (DCP 60/2005), Thai Institute of Directors Association • Director Accreditation Program (DAP 23/2004), Thai Institute of Directors Association • Capital Market Academy Leadership Program (CMA 5), Capital Market Academy • Public Director Certification Program (PDI 3), Public Director Institute


042

The Board of Directors

Work Experience: 2011 • Independent Director, Audit Committee Member and Risk Management Committee Member, Krung Thai Bank Public Company Limited • Chairman of the Board of Directors, KTB Leasing Company Limited 2010 - 2011 • Director, Federation of Thai Capital Market Organizations 2009 - 2011 • Director and Chairman of the Audit Committee, MCOT Public Company Limited • Chairman of the Risk Management Committee and Executive Director, Bualuang Securities Public Company Limited • Director, The Thai Bond Market Association 2008 • Director, Settrade Dot Com Company Limited 2007 - 2011 • Executive Director, Association of Thai Securities Companies 2007 - 2008 • IT Steering Committee, The Stock Exchange of Thailand 2005 - 2009 • President and Executive Director, Bualuang Securities Public Company Limited Current Position in Other Organisations: In listed companies: • Independent Director and Chairman of Audit Committee, Principle Capital Public Company Limited In non-listed companies: • Chairman of the Board of Directors, Thai Credit Guarantee Corporation (TCG) • Director, The Krungthep Thanakom Company Limited • President, Association of Thai Securities Companies • Advisor, Federation of Thai Capital Market Organizations In other organisations that may cause any conflict of interest to the Company: - None -

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Meeting Attendance in 2015: 1. The Board of Directors’ Meeting 2. The Independent Directors’ Meeting 3. The Audit Committee Meeting 4. The Good Corporate Governance Committee Meeting 5. The Shareholders’ Meeting in 2015

14/18 3/4 7/8 4/4

times times times times

1/1 time

Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent. Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None Additional Information on Holding Independent Directors Status: 1. Not being related to management, major shareholder of the Company or its subsidiaries 2. Not being related to the Company, its subsidiaries, its associated companies, or a juristic entity that may have conflict of interest at present or the past 2 years • Not being director in roles of management, employees, or advisor who receives full time salary • Not providing professional service (i.e. auditor or legal counsel) • Not having significant business relationship with the Company in the manner that may interfere with the independent judgment


The Board of Directors

8. Mr. Somchai Pipitvijitkorn

Director, Risk Management Committee Member and Nomination and Remuneration Committee Member Age 76 years

Family Relationship with Other Directors: - None Servicing Period: 12 years and 8 months (from 29 April 2003 to 31 December 2015) % of Shareholding: - None Education: • M.B.A., Michigan State University, U.S.A. • Bachelor’s Degree (Second Honors), Faculty of Accounting, Chulalongkorn University Director Training Programs: • Seminar on Directors’ Compensation of Thai Companies 2004 held on 22 February 2005 Work Experience: 2010 - 2014 • Chairman of the Board of Directors, Bangsaphan Barmill Public Company Limited 2004 - 2014 • Director, Bangsaphan Barmill Public Company Limited 2009 - 2012 • Director, Thai Cold Rolled Steel Sheet Public Company Limited 1990 - 1999 • Director, Sahaviriya Steel Industries Public Company Limited • Director, Thai Cold Rolled Steel Sheet Public Company Limited 1986 - 1998 • Director, Siam City Cement Public Company Limited 1984 - 1999 • Director, Bank of Ayudhya Public Company Limited 1983 - 1999 • Director, Ayudhya Life Assurance Public Company Limited

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

043

Current Position in Other Organisations: In listed companies: • Director, MK Restaurant Group Public Company Limited In non-listed companies: - None In other organisations that may cause any conflict of interest to the Company: • Director, Sahaviriya Plate Mill Public Company Limited Meeting Attendance in 2015: 1. The Board of Directors’ Meeting 16/18 times 2. The Nomination and Remuneration 2/3 times Committee Meeting 3. The Risk Management Committee Meeting 4/4 times 4. The Shareholders’ Meeting in 2015 0/1 time Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent. Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None -


044

The Board of Directors

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

9. Mr. Kamol Juntima

1995 - 1999 • Director and Chairman of Executive Board, Government Housing Bank 1993 - 1998 • Deputy Permanent Secretary for Finance, Ministry of Finance

Family Relationship with Other Directors: - None -

Current Position in Other Organisations: In listed companies: • Chairman of the Board of Directors, IT CITY Public Company Limited In non-listed companies: • Chairman of the Board of Directors, West Coast Engineering Company Limited • Director, Prachuap Port Company Limited • Chairman of the Board of Directors, TRIS Rating Company Limited In other organisations that may cause any conflict of interest to the Company: - None -

Director and Chairman of the Good Corporate Governance Committee Member Age 77 years

Servicing Period: 17 years and 8 months (from 28 April 1998 to 31 December 2015) % of Shareholding: 0.00399% (1,284,000 shares) Education: • M.P.A., National Institute of Development Administration (NIDA) • Bachelor of Commerce, Thammasat University • Bachelor of Accountancy, Thammasat University • The National Defense Regular Course (Class 33), National Defense College Director Training Programs: • Directors Certification Program (DCP 3/2000), Thai Institute of Directors Association • The Role of The Chairman Program (RCP 4/2001), Thai Institute of Directors Association • Board & CEO 1/2003, Thai Institute of Directors Association • DCP Refresher Course 4/2007, Thai Institute of Directors Association Work Experience: 2008 - 2013 • Chairman of Ethics Committee, Federation of Accounting Professions 2003 - 2013 • Directors and Chairman of the Audit Committee, Electronic Industry Public Company Limited 2007 - 2012 • Chairman of Audit and Evaluation Committee, Ministry of Education 2000 - 2002 • Chairman of the Board Financial Sector Restructuring Authority (FRA) 1998 - 2000 • Audit Committee Chairman, Provincial Electricity Authority 1998 • Comptroller General, Ministry of Finance 1996 - 1998 • Chairman of the Board Government Lottery Office

Meeting Attendance in 2015: 1. The Board of Directors’ Meeting 2. The Good Corporate Governance Committee Meeting 3. The Shareholders’ Meeting in 2015

17/18 times 4/4 times 1/1 time

Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent. Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None -


The Board of Directors

10. Mr. Win Viriyaprapaikit

Director, Group Chief Executive Officer, Group Executive Officer and President Age 45 years

Family Relationship with Other Directors: Son of Mr. Wit Viriyaprapaikit Servicing Period: 16 years and 6 months (from 30 June 1999 to 31 December 2015) % of Shareholding: - None Education: • M.B.A., Sasin Graduate Institute of Business Administration, Chulalongkorn University • Bachelor’s degree in Industrial Engineering, Keio University, Tokyo, Japan Director Training Programs: • Directors Certification Program (DCP 100/2008), Thai Institute of Directors Association • The Role of The Chairman Program (RCP 20/2008), Thai Institute of Directors Association • Capital Market Academy Leadership Program (CMA 5), Capital Market Academy Work Experience: 2010 - 2015 • Director and President, Sahaviriya Steel Industries UK Limited 2008 - 2014 • Director and Management Committee Member, Thai Cold Rolled Steel Sheet Public Company Limited 2012 - 2013 • Chairman of the Board of Directors and Chairman of the Management Committee, Thai Cold Rolled Steel Sheet Public Company Limited 1996 - 2012 • Director, Thai Coated Steel Sheet Company Limited 2010 - 2011 • Director, Redcar Bulk Terminal Limited 1992 - 2009 • Director, Western Housing Company Limited 1996 - 2005 • Director, Sahaviriya Plate Mill Public Company Limited 1999 - 2003 • Director, Thai Cold Rolled Steel Sheet Public Company Limited

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

045

Current Position in Other Organisations: In listed companies: • Director, Bangsaphan Barmill Public Company Limited In non-listed companies: • Director and Chairman of the Board of Executive Directors, West Coast Engineering Company Limited • Director and Chairman of the Board of Executive Directors, Prachuap Port Company Limited • Director, Sahaviriya Group Corporation Limited • Director, Sahaviriya Inter Steel Holdings Company Limited • Director, Sahaviriya Iron and Steel Company Limited In listed companies other organisations that may cause any conflict of interest to SSI: • Director, Sahaviriya Management Company Limited • Chairman of the Board of Directors, Thai Steel Sales Company Limited • Director, Prapawit Building Property Company Limited Meeting Attendance in 2015: 1. The Board of Directors’ Meeting 2. The Shareholders’ Meeting in 2015

18/18 times 1/1 time

Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent. Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None -


046

The Board of Directors

11. Mr. Nava Chantanasurakon

Director, the Nomination and Remuneration Committee Member, Group Executive Officer and Vice President, Group Public Affairs Division and Commercial Division Age 50 years

Family Relationship with Other Directors: - None Servicing Period: 6 months 12 days (from 18 June 2015 to 31 December 2015) % of Shareholding: - None Education: • Master of Public Administration (Public Policy & Project Management), National Institute of Development Administration (NIDA) • Bachelor of Arts (Politics and Government) 1st Class Honor, Thammasat University Director Training Programs: • Directors Certification Program (DCP 104/2008), Thai Institute of Directors Association • Capital Market Academy Leadership Program (CMA 19), Capital Market Academy • National Defense Program (NDC 57), National Defense College Work Experience: 2014 - 2015 • Chairman of the Board of Directors, Thai Cold Rolled Steel Sheet Public Company Limited 2012 - 2015 • Chairman of the Management Committee, Thai Cold Rolled Steel Sheet Public Company Limited 2012 - 2014 • President, Thai Cold Rolled Steel Sheet Public Company Limited 2003 - 2007 • Director, Corporate Affairs Division, Pikul-thong Lum-sum Group of Companies 1991 - 2003 • Deputy General Manager, Human Resources Department, Toyota Motor Thailand Company Limited

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Current Position in Other Organisations: In listed companies: - None In non-listed companies: • Director and Management Committee Member, Thai Cold Rolled Steel Sheet Public Company Limited • Director and Executive Director, Thai Coated Steel Sheet Company Limited In other organisations that may cause any conflict of interest to the Company: - None Meeting Attendance in 2015: 1. The Board of Directors’ Meeting 2. The Nomination and Remuneration Committee Meeting

11/11 times 0/0 time

Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent. Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None -


The Management

The Management

1. Mr. Win Viriyaprapaikit

Group Chief Executive Officer, Group Executive Officer and President Age 45 years

Education: • M.B.A., Sasin Graduate Institute of Business Administration, Chulalongkorn University • Bachelor’s degree in Industrial Engineering, Keio University, Tokyo, Japan

Director Training Program: • Directors Certification Program (DCP 100/2008), Thai Institute of Directors Association • The Role of The Chairman Program (RCP 20/2008), Thai Institute of Directors Association • Capital Market Academy Leadership Program (CMA 5), Capital Market Academy

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

047

Work Experience: 2010 - Present • Director, Bangsaphan Barmill Public Company Limited 2007 - Present • Director, Sahaviriya Iron and Steel Company Limited 2005 - Present • Director, Prapawit Building Property Company Limited 2002 - Present • Director and Chairman of the Board of Executive Directors, West Coast Engineering Company Limited 1999 - Present • Director, Sahaviriya Inter Steel Holdings Company Limited • Director, Sahaviriya Management Company Limited • Director and Chairman of the Board of Executive Directors, Prachuap Port Company Limited 1997 - Present • Chairman of the Board of Directors, Thai Steel Sales Company Limited 1996 - Present • Director, Sahaviriya Group Corporation Limited 2010 - 2015 • Director and President, Sahaviriya Steel Industries UK Limited 2008 - 2014 • Director and Management Committee Member, Thai Cold Rolled Steel Sheet Public Company Limited 2012 - 2013 • Chairman of the Board of Directors and Chairman of the Management Committee, Thai Cold Rolled Steel Sheet Public Company Limited 1996 - 2012 • Director, Thai Coated Steel Sheet Company Limited 2010 - 2011 • Director, Redcar Bulk Terminal Limited 1992 - 2009 • Director, Western Housing Company Limited 1996 - 2005 • Director, Sahaviriya Plate Mill Public Company Limited 1999 - 2003 • Director, Thai Cold Rolled Steel Sheet Public Company Limited


048

The Management

Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent. Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None -

2. Mr. Nava Chantanasurakon

Group Executive Officer and Vice President, Group Public Affairs Division and Commercial Division Age 50 years

Education: • Master of Public Administration (Public Policy & Project Management), National Institute of Development Administration (NIDA) • Bachelor of Arts (Politics and Government) 1st Class Honor, Thammasat University Director Training Program: • Directors Certification Program (DCP 104/2008), Thai Institute of Directors Association • Capital Market Academy Leadership Program (CMA 19), Capital Market Academy • National Defense Program (NDC 57), National Defense College

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Work Experience: 2012 - Present • Director and Management Committee Member, Thai Cold Rolled Steel Sheet Public Company Limited • Director and Executive Director, Thai Coated Steel Sheet Company Limited 2014 - 2015 • Chairman of the Board of Directors, Thai Cold Rolled Steel Sheet Public Company Limited 2012 - 2015 • Chairman of the Management Committee, Thai Cold Rolled Steel Sheet Public Company Limited 2012 - 2014 • President, Thai Cold Rolled Steel Sheet Public Company Limited 2003 - 2007 • Director, Corporate Affairs Division, Pikul-thong Lum-sum Group of Companies 1991 - 2003 • Deputy General Manager, Human Resources Department, Toyota Motor Thailand Company Limited Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent. Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None -


The Management

3. Mr. Kittisak Mapanao

Group Executive Officer and Chief Technology Officer Age 49 years

Education: • M.B.A., Chulalongkorn University • B.Eng. (Industrial Engineering), Khon Kaen University Director Training Program: • Directors Certification Program (DCP 104/2009), Thai Institute of Directors Association Work Experience: 2015 - Present • President, West Coast Engineering Company Limited 2012 - Present • Director and Executive Director, Prachuab Port Company Limited 2011 - Present • Director and Executive Director, West Coast Engineering Company Limited 2013 - 2015 • Director, Sahaviriya Steel Industries UK Limited 2010 - 2012 • Director and Management Committee Member, Thai Cold Rolled Steel Sheet Public Company Limited 1991 - 1992 • Industrial Engineer, Hana Coil Company Limited Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent. Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None -

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

049

4. Mr. Narongrit Chotnuchittrakul

Group Executive Officer, Group Chief Finance Officer, Vice President - Finance & Accounting Division and Secretary to the Risk Management Committee Age 46 years

Education: • M.B.A., Dhurakijpundit University • Bachelor of Business Administration, Bangkok University • Bachelor of Accounting, Siam University

Work Experience: 2013 - Present • Director and Executive Director, Thai Coated Steel Sheet Company Limited 2011 - Present • Director and Executive Director, West Coast Engineering Company Limited 2012 - 2015 • President, West Coast Engineering Company Limited 2009 - 2011 • Vice President - Finance and Accounting Division, Thai Cold Rolled Steel Sheet Public Company Limited Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent. Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None -


050

5. Mr. Somsak Sivapaiboon

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

The Management

Group Executive Officer Age 53 years

Education: • M.S. (Logistics and Supply Chain Management), Sripatum University • M.B.A., Sukhothai Thammathirat Open University • Bachelor of Management Science, Sukhothai Thammathirat Open University Director Training Program: • Directors Accreditation Program (DAP 60/2006), Thai Institute of Directors Association • Directors Certification Program (DCP 84/2007), Thai Institute of Directors Association • Finance for Non-Finance Director (FND 34/2007), Thai Institute of Directors Association • Capital Market Academy Leadership Program (CMA 9), Capital Market Academy Work Experience: 2015 - Present • Chairman of the Board of Directors and Chairman of the Management Committee, Thai Cold Rolled Steel Sheet Public Company Limited 2013 - Present • Director, Prachuap Port Company Limited • Director, West Coast Engineering Company Limited 2010 - Present • Chairman of the Board of Directors, Pornpiyacharn Transport Company Limited 2013 - 2015 • Director, Sahaviriya Steel Industries UK Limited 2010 - 2012 • President, Thai Cold Rolled Steel Sheet Public Company Limited • Director, Thai Coated Steel Sheet Company Limited 2006 - 2012 • Deputy Chairman of the Board of Directors, Chu Kai Public Company Limited 2004 - 2012 • Director and Executive Director, Thai Cold Rolled Steel Sheet Public Company Limited

2001 - 2012 2005 - 2010 2001 - 2010 2000 - 2005

• Director, Prachuap Port Company Limited • President, Line Transport Company Limited • President, Prachuap Port Company Limited • President, Bangsaphan Transport Company Limited 1997 - 2000 • General Manager - Sales & Marketing, Thai Steel Sales Company Limited

Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent. Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None -


The Management

6. Mr. Thavorn Cananub

Vice President, Port Business Age 53 years

Education: • M.Eng. (Industrial Engineering), Kasetsart University • B.Eng. (Production Engineering), King Mongkut’s University of Technology Thonburi Work Experience: 2013 - Present • Director, Executive Director and President, Prachuap Port Company Limited 1996 - 2013 • Assistant Vice President, Office of the President, Sahaviriya Steel Industries Public Company Limited Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent. Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None -

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

051

7. Mr. Thinnakorn Phadungwong

Vice President, Group Product Development Office, Group Technology Office Age 48 years

Education: • Master’s Degree of Metallurgical Engineering, Chulalongkorn University • Bachelor’s Degree of Industrial Engineering, Kasetsart University Work Experience: 2013 - 2015 • Vice President - Manufacturing Division, Sahaviriya Steel Industries Public Company Limited 2000 - 2012 • Assistant Vice President - Manufacturing Division (Operation), Sahaviriya Steel Industries Public Company Limited Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent. Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None -


052

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

The Management

8. Mr. Peter Rowson

9. Mr. Suchart Plysiri

Education: • The Fellowship of Chartered Accountants, Chartered Accountant (ICAEW), Institute of Chartered Accountants of England and Wales Manchester Metropolitan University

Vice President, Group Financial Accounting of Office Age 52 years

Work Experience: 2013 - 2015 • Finance Director, Sahaviriya Steel Industries UK Limited 2009 - 2011 • Finance Director, V2O Management Company Limited 2004 - 2008 • CFO, Focus Energy Company Limited Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent. Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None -

Secretary to the Nomination and Remuneration Committee Age 47 years

(Retired from the position due to being transferred to take a position of Assistant Vice President at Downstream Steel Business and designated to work in the position of Executive Officer, Human Resource & Administration Division, Thai Coated Steel Sheet Company Limited since 1 January 2016)

Education: • Master of Political Science, Chulalongkorn University • Bachelor of Political Science, Thammasat University Work Experience: 2016 - Present • Executive Officer, Human Resources & Administration Division, Thai Coated Steel Sheet Company Limited 2009 - 2014 • Executive Officer, Human Resources & Administration Division, Thai Coated Steel Sheet Company Limited 2008 - 2009 • Human Resources Manager, Siam Toyota Manufacturing Company Limited 2006 - 2008 • Human Resources Manager, Colgate Palmolive (Thailand) Company Limited 2003 - 2008 • Employment Manager, Toyota Motor Thailand Company Limited Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent. Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None -


The Management

10. Mr. Yongyuth Malithong

Vice President, Group Human Resources Office, Human Resources Division, Group Purchasing Office and Secretary to the Nomination and Remuneration Committee Age 45 years (Designated as Secretary to the Nomination and Remuneration Committee due to being appointed as Vice President, Human Resource Division since 1 January 2016.)

Education: • Master of Public Administration (Human Resources Management), National Institute of Development Administration (NIDA) • Bachelor of Art (Political Science), Chiang Mai University Work Experience: 2008 - 2010 • HR & GA Director, New International School of Thailand 2007 - 2008 • Operation Director, Master Car Rental Company Limited (Millennium Auto Group) 2006 - 2007 • Operation Manager, Master Car Rental Company Limited (Millennium Auto Group) Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent. Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None -

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

053

11. Mrs. Wannee Sirikanchana

Secretary to the Audit Committee and Secretary to the Good Corporate Governance Committee Age 60 years

(Retired from the position of Secretary to the Audit Committee and Secretary to the Good Corporate Governance Committee due to retirement since 1 January 2016.)

Education: • M.S. (Accounting), Thammasat University • Bachelor of Law, Thammasat University • Bachelor of Accounting, Thammasat University Director Training Program: • Directors Certification Program (DCP 13/2001), Thai Institute of Directors Association • Audit Committee Program (ACP 5/2005), Thai Institute of Directors Association Work Experience: 1988 - 1998 • Vice President - Internal Audit Department, The Stock Exchange of Thailand Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent. Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None -


054

12. Ms. Pattamawan Boontang

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

The Management

Secretary to the Audit Committee and Secretary to the Good Corporate Governance Committee Age 40 years

(Designated as Secretary to the Audit Committee and Good Corporate Governance Committee due to being appointed as Assistant Vice President of Group Internal Audit Office since 6 January 2016

Education: • M.B.A., Southeastern University (London Campus) • B. Sc. in Computer Science, The University of the Thai Chamber of Commerce Work Experience: 2011 - 2015 • Audit Manager-IT, Sahaviriya Steel Industries Public Company Limited 2005 - 2011 • Assistant Audit Manager-IT, Sahaviriya Steel Industries Public Company Limited Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent. Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None -

13. Mr. Surasak Ngamsidhiphongsa

Company Secretary Age 57 years

Education: • M.B.A., Thammasat University • M.A. (Economic Law), Chulalongkorn University • LL.M. (Business Law), Ramkhamhaeng University • M.P.P.M., National Institute of Development Administration (NIDA) • Barrister-at-law, Institute of Legal Education Thai Bar Association • Bachelor of Law, Ramkhamhaeng University Director Training Program: • Directors Certification Program (DCP 15/2002), Thai Institute of Directors Association • Company Secretary Program (CSP 5/2004), Thai Institute of Directors Association • TCLA Executive Development Program (EDP 8), Thai Listed Companies Association Work Experience: 1988 - 1993 • Deputy Secretary to the Board of Directors, Siam Realty and Services Company Limited 1985 - 1993 • Senior Analyst, Bank of Ayudhya Public Company Limited Criminal Record During the Past 10 Years: 1. Never been sentenced by a judgment in criminal offence. 2. Never been sentenced by a judgment to be bankrupt or insolvent. Punishment Record During the Past 5 Years Related to the Commission of Offences under the Provisions of the Securities and Exchange Act B.E. 2535 or Derivatives Act B.E. 2546 in the Following Cases: 1. Act in bad faith or with gross negligence. - None 2. Disclosure or providing the information or a false statement which may be misled, or concealing facts which should have been stated in materiality that may affect on the decisionmaking to shareholders, investors, or related persons. - None 3. Unfair practices or taking advantage of investors in the trading of securities or derivatives, or being or having been participated in or supported such act. - None -


Shareholding of Directors and Management

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

055

Shareholding of Directors and Management No.

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

Director and Management Name

Mr. Wit Viriyaprapaikit Mr. Somchai Sakulsurarat Mr. Tongchat Hongladaromp Mr. Siripol Yodmuangcharoen Mr. Permpoon Krairiksh Mr. Pichai Eursirisub Mr. Yarnsak Manomaiphiboon Mr. Somchai Pipitvijitkorn Mr. Kamol Juntima Mr. Piya Viriyaprapaikit Mr. Win Viriyaprapaikit Mr. Nava Chantanasurakon Mr. Kittisak Mapanao Mr. Narongrit Chotnuchittrakul Mr. Somsak Sivapaiboon Mr. Thavorn Cananub Mr. Thinnakorn Phadungwong Mr. Peter Rowson Miss Wanna Tangcharoenching Mr. Ercument Unal

31 December 2014 31 December 2015 (Par value of (Par value of Baht 1 per share) Baht 1 per share)

Increase (Decrease) in No. of Shares during 2015 (Par value of Baht 1 per share)

100 shares 100 shares - - - - - - - - 63,640,600 shares 63,640,600 shares - - - - 1,284,000 shares 1,284,000 shares - - - - - - 1,892,000 shares 1,892,000 shares - - 200,000 shares 500,000 shares - - - - - - - - - -

300,000 shares -

Remark: No. 10 Mr. Piya Viriyaprapaikit resigned as a director of the Company on 16 June 2015. No. 19 Miss Wanna Tangcharoenching retired as management of the Company on 17 April 2015. No. 20 Mr. Ercument Unal resigned as management of the Company on 1 December 2014.


056

Report of the Nomination and Remuneration Committee for 2015

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Report of the Nomination and Remuneration Committee for 2015

The Nomination and Remuneration Committee (the “Committee”) hereby reports the assignments performed by the Nomination and Remuneration Committee for further consideration and presentation to the Annual General Meeting of Shareholders for the year 2016 1) as appropriate. The meeting of the Board of Directors of Sahaviriya Steel Industries Public Company Limited No. 5/2011 held on 11 August 2011 resolved to approve the combination of the Nomination Committee and the Remuneration Committee to become the Nomination and Remuneration Committee. The Committee comprises at least 3 directors of the Company as members which at least 1 member has to be an independent director with the Vice President of Human Resources and Administration Division as the Secretary to the Committee. The term of office is from 1 September 2014 to 31 August 2017. The Committee has the duty to select qualified candidates for the nomination of the directors or the President of the Company which is to be further proposed to the Board of Directors’ meeting or the shareholders’ meeting 1) as the case may be. Moreover, the Committee has the duty to consider the guidelines for determining the remuneration of the Board of Directors, committees appointed by the Board of Directors, the President as well as the compensation structure of senior executives of the Company based on fair and reasonable criteria or procedure and remuneration structure. Existing members of the Nomination and Remuneration Committee are as follows: (1) Mr. Siripol Yodmuangchareon Chairman of the Nomination and Remuneration Committee (2) Mr. Somchai Pipitvijitkorn Nomination and Remuneration Committee Member (3) Mr. Nava Chantanasurakon Nomination and Remuneration Committee Member (4) Mr. Suchart Plysiri Secretary to the Nomination and Remuneration Committee The duties performed as assigned by the Board of Directors consist of: 1. The Nomination and Remuneration Committee held 2 meetings in 2015 to consider the following matters: 1.1. The meeting of the Nomination and Remuneration Committee was held on 10 April 2015 to consider an adjustment of the President’s salary. The Committee considered an adjustment of the President’s salary based on the overall performance of the Company in 2015 as well as other factors including the Company’s financial results and historical salary adjustments of the President. Nevertheless, the President expressed his intention not to be considered for an annual salary increase in 2015 in order to moderate the liquidity problem of the Company. The Committee unanimously resolved to approve as proposed and will propose to the Board of Directors for consideration. 1.2 The meeting of the Nomination and Remuneration Committee was held on 10 June 2015 to acknowledge the resignation of Mr. Piya Viriyaprapaikit and consider the qualified candidate to be a Director and Nomination and Remuneration Committee Member. Mr. Piya Viriyaprapaikit has resigned from the position of the Director and Nomination and Remuneration Committee Member on 16 June 2015. In order to follow the Company’s regulations and the criteria stated in the Nomination and Remuneration Charter, the meeting of the Nomination and Remuneration Committee to consider the qualified candidate for the replacement was

1)

As the Court issued an order for the Company’s Business Rehabilitation on 10 March 2016, the Company will not be required to hold the Annual General Meeting until the Company exits Business Rehabilitation.


Report of the Nomination and Remuneration Committee for 2015

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

057

held on 10 June 2015 at 12.00 at Sahaviriya Steel Industries Public Company Limited (Head Office). As there was no qualified candidate nominated by the Committee Members in the meeting, the Committee selected Mr. Nava Chantanasurakon, an internal qualified candidate, who has knowledge and experience in economic and social aspects as well as holding a position of Chairman of the Board of Directors and the Director of SSI affiliates. He also has expertise in human resource management and nominated and remuneration. His knowledge and competency is considered to be beneficial to the Company’s business. In addition, the Committee has considered an issue regarding the conflict of interest, and resolved to propose to the Board of Directors for the following considerations. 1) Consider Mr. Nava Chantanasurakon to be the Director as replacement of Mr. Piya Viriyaprapaikit 2) Consider Mr. Nava Chantanasurakon to be a Member of Nomination and Remuneration Committee as replacement of Mr. Piya Viriyaprapaikit Subsequently, the Committee resolved to propose to the Board of Directors for consideration on following matters: 1) Approve and nominate Mr. Nava Chantanasurakon to the Board of Directors for consideration of appointment as a Director as replacement of Mr. Piya Viriyaprapaikit 2) Approve and nominate Mr. Nava Chantanasurakon to the Board of Directors for consideration of appointment as a Member of Nomination and Remuneration Committee as replacement of Mr. Piya Viriyaprapaikit 2. The Nomination and Remuneration Committee held 1 meeting in 2016 to consider the following matters: The meeting of the Nomination and Remuneration Committee on 15 February 2016 considered various issues as follows: 2.1 Reconsideration of the Charter of Nomination and Remuneration that is in the article two. The article two states that the configuration of the Board of Directors will approve the appointment of Chairman and Director of Nomination and Remuneration Committee and consider the non-executive director in order to prevent conflicts of interest. 2.2 Stipulation of the directors’ remuneration. As the Committee considered that the existing rate of the directors’ remuneration was appropriate given the current economic condition, the Committee therefore resolved to maintain the remuneration payment determination from 1 to 6 unless resolved to change by the shareholders’ meeting 1) and resolved to refrain the annual payment to the directors in 2015 as the details follows: Financial Remuneration The determination of remuneration as approved by the shareholders’ meeting: 1. The meeting allowances paid to directors and committees appointed by the Board of Directors and approved by the shareholders’ meeting can be summarised as follows: (1) (1.1) Directors 25,000 Baht/month (1.2) Chairman of the Audit Committee 18,750 Baht/meeting Audit Committee Members 15,000 Baht/meeting (1.3) Chairman of the Good Corporate Governance Committee 12,500 Baht/meeting Good Corporate Governance Committee Members 10,000 Baht/meeting (1.4) Chairman of the Risk Management Committee 12,500 Baht/meeting Risk Management Committee Members 10,000 Baht/meeting (1.5) Chairman of the Nomination and Remuneration Committee 12,500 Baht/meeting Nomination and Remuneration Committee Members 10,000 Baht/meeting (2) Any director of the Company appointed as a member of any committees by the Board of Directors is entitled to receive additional remuneration being such a committee member according to more duties and time dedicated. 2. The Chairman and the Deputy Chairman of the Board of Directors are entitled to monthly remuneration for full-time duties of Baht 300,000 per month and Baht 200,000 per month respectively. However, they are not entitled to receive meeting allowances from the meeting of Board of Directors and the meeting of committees appointed by the Board of Directors. 3. The Chairman of Audit Committee is entitled to receive extra remuneration of Baht 10,000 per month from the duty to advise the particular audit in detail apart from the regular audit as an audit committee member. 4. The director who is also an employee of the Company is only entitled to receive the remuneration as an employee; no director’s remuneration is to be paid. 1)

As the Court issued an order for the Company’s Business Rehabilitation on 10 March 2016, the Company will not be required to hold the Annual General Meeting until the Company exits Business Rehabilitation.


058

Report of the Nomination and Remuneration Committee for 2015

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

5. The premium for health insurance, accident insurance and life insurance of not over Baht 20,000 per person is to be paid to each director. For any director the insurance company refuses to cover, in whole or in part, and/or refuses to cover some specific diseases by any reason in case of health insurance, the Company will be directly responsible for covering all such directors refused by the insurance company in the coverage amount equal to the insurance coverage and/or the benefits which the life, health and accident insurance company covers the directors in accordance with the premium rate approved by the shareholders’ meeting. 6. The director’s remuneration in the form of annual payment or bonus (1) Director’s annual payment is to be paid when dividend is distributed to the shareholders. In any year the Company does not pay dividend to the shareholders, directors will not receive the annual payment in that year. (2) The rate of annual payment, as approved by the meeting of shareholders, is in range of 0.25% to 0.50% of dividend paid to the shareholders. The annual payment for the Chairman and the Deputy Chairman of the Board of Directors are 10% and 5% higher than the rate paid to directors, respectively. (3) In case any director is in the position for less than 1 year, the annual payment will be proportionately paid according to the period of the position taken. 2.3 Nominated qualified candidates to be the Company’s directors replacing 4 directors retiring by rotation in the Annual General Meeting of Shareholders for the year 2016 1) as follows: 1. Mr. Siripol Yodmuangchareon Director, Independent Director and Chairman of Nomination and Remuneration Committee 2. Mr. Kamol Juntima Director and Chairman of Good Corporate Governance Committee 3. Mr. Win Viriyaprapaikit Director, President and Chief Executive Office of the Company’s Group The directors retiring by rotation as listed above may be re-elected by the shareholders’ meeting to be in the position of director for another term of office. The Nomination and Remuneration Committee considered selecting qualified candidates to replace the directors retiring by rotation in accordance with the following procedures: (1) The Nomination and Remuneration Committee to acknowledge the list of directors who will retire by rotation and the list of outside persons nominated to be candidates for the position of the Company’s directors either by shareholders or the Company’s directors. (2) The Nomination and Remuneration Committee to consider the list of candidates to be the Company’s directors concerning the qualifications and disqualifications as stipulated by the public limited company laws. (3) The Nomination and Remuneration Committee to approve the list of qualified candidates to be the Company’s directors. (4) The Nomination and Remuneration Committee to nominate the qualified candidates to replace the directors retiring by rotation to the Board of Directors’ meeting for considering and further proposing to the Annual General Meeting of Shareholders. For the coming Annual General Meeting of Shareholders for the year 2016 1), the Company distributed the invitation letter to the shareholders via the Company’s website and electronic media of The Stock Exchange of Thailand to give shareholders an opportunity to propose qualified candidates to be the Company’s directors during the period from 28 August 2015 to 31 January 2016. However, after the specified due date, there was no shareholder proposing any candidate in advance for the director election. The Nomination and Remuneration Committee considered the education and past and current working experience of each director and had an opinion that all 4 directors retiring by rotation had high level of knowledge, competency, and experience in various areas and had been the key persons to generate strengths and growth to the Company. Therefore, the Committee resolved to propose all 4 directors to the Board of Directors’ meeting to further propose to the shareholders’ meeting for re-election. 2.4 Considered qualifications, names, and development plan for the qualified candidates as the successors to President.

1)

Mr. Siripol Yodmuangchareon

Chairman of the Nomination and Remuneration Committee 15 February 2016

As the Court issued an order for the Company’s Business Rehabilitation on 10 March 2016, the Company will not be required to hold the Annual General Meeting until the Company exits Business Rehabilitation.


Remuneration of Directors and Management

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

059

Remuneration of Directors and Management

1. Total Monetary Remuneration

The directors’ remuneration, approved by the Annual General Meeting of Shareholders, was as follows: 1.1 The remuneration of Meeting Allowance for directors and the members of committees appointed by the Board of Directors, approved by the Meeting of Shareholders, was as follows: (1) (1.1) Directors 25,000 Baht/month (1.2) Chairperson of the Audit Committee 18,750 Baht/meeting Audit Committee Members 15,000 Baht/meeting (1.3) Chairman of the Good Corporate Governance Committee 12,500 Baht/meeting Good Corporate Governance Committee Members 10,000 Baht/meeting (1.4) Chairman of the Risk Management Committee 12,500 Baht/meeting Risk Management Committee Members 10,000 Baht/meeting (1.5) Chairman of the Nomination and Remuneration Committee 12,500 Baht/meeting Nomination and Remuneration Committee Members 10,000 Baht/meeting (2) The Company’s directors who were appointed as a member of each committee by the Board of Directors should receive the additional remuneration according to additional job responsibilities and working hours. 1.2 The Chairman of the Board of Directors and the Deputy Chairman of the Board of Directors shall be entitled to monthly remuneration for full-time performance of Baht 300,000 and Baht 200,000 respectively. However, they shall not be entitled to any other meeting allowances, both to be paid for the Board of Directors and other committee appointed by the Board of Directors. 1.3 The Chairman of the Audit Committee shall receive extra remuneration for the provision of suggestion regarding the details of special audit other than normal audit serviced as an audit committee in an amount of Baht 10,000 per month. 1.4 Directors who are also an employee of the Company shall be entitled to compensation as an employee only, and shall not receive any other remuneration as a director. 1.5 Health, accident, and life insurance premiums shall not exceed Baht 20,000 per person. For any directors whom insurance companies decline to offer any or all insurance coverage and/or exclude coverage of certain types of illness in the case of health insurance for whatever reason, the Company shall be directly responsible for disbursement to such directors for amount up to the claim or sum insured available from the health, accident and life insurance policies had the director been insured for the same insurance premium approved by shareholders.


060

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Remuneration of Directors and Management

1.6 The directors’ remuneration or annual bonuses (1) The directors’ bonuses shall be paid only if there is a dividend payment to the shareholders. If the Company has no dividend payment in any year, the directors shall not receive the directors’ bonuses on such year. (2) The directors’ bonuses rates should account for 0.25% to 0.50% of the dividend payment to the shareholders. The Chairman of the Board of Directors and the Deputy Chairman of the Board of Directors should receive the directors’ bonuses at 10% and 5% higher than those of the directors respectively. (3) The directors whose working period is less than one year shall receive the directors’ bonuses in proportion to their actual working period. Remunerations shall be paid according to principles 1.1 to 1.6 mentioned above unless the shareholders’ meeting resolves otherwise. In 2015, the 26th Annual General Meeting of Shareholders held on 20 April 2015 acknowledged the remunerations paid for the year of 2014 to each director and each committee appointed by the Board of Directors. The meeting also acknowledged the directors’ annual bonuses for the year of 2014 to be omitted. As at 31 December 2014, the Company’s retained earnings after deduction of discount on ordinary shares was insufficient for an allocation of dividend payment; therefore, the Company was neither able to pay dividends to the shareholders nor pay annual bonuses to the directors in accordance with criteria as approved by the shareholders’ meeting. Summary of 2015 Monetary Remuneration for the Directors of the Company and the Members of the Committees Appointed by the Board of Directors Meeting Allowance (Baht) Name and Position

Board of Directors

1. Mr. Wit Viriyaprapaikit 1) - - 2. Mr. Somchai Sakulsurarat 2) 3) 3. Mr. Tongchat Hongladarom 4) 300,000 4. Mr. Siripol Yodmuangcharoen 5) 300,000 5. Mr. Permpoon Krairiksh 300,000 6. Mr. Pichai Eursirisub 300,000 7. Mr. Yarnsak Manomaiphiboon 300,000 8. Mr. Somchai Pipitvijitkorn 300,000 6) 300,000 9. Mr. Kamol Juntima 10. Mr. Piya Viriyaprapaikit* 137,500 11. Mr. Nava Chantanasurakon** - 12. Mr. Win Viriyaprapaikit*** - Total 2,237,500

Good Nomination Total Risk Corporate and Audit Remuneration Management Committee Remuneration Governance Committee Committee** Committee

- - - - 90,000 - 105,000 - - - - - 195,000

- - - 37,500 - - - 20,000 - 10,000 - - 67,500

- - - - - 40,000 40,000 - 50,000 - - - 130,000

- - 50,000 - 40,000 - - 40,000 - - - - 130,000

- 350,000 337,500 430,000 340,000 445,000 360,000 350,000 147,500 - - 2,760,000


Remuneration of Directors and Management

Remarks: 1) 2) 3) 4) 5) 6) ** ** *** -

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Chairman of the Board of Directors Deputy Chairman of the Board of Directors Chairman of the Audit Committee Chairman of the Risk Management Committee Chairman of the Nomination and Remuneration Committee Chairman of the Good Corporate Governance Committee Mr. Piya Viriyaprapaikit has resigned as the Company’s Board of Directors and a Member of the Nomination and Remuneration Committee since 16 June 2015 due to health problems. Mr. Nava Chantanasurakon, Group Executive Officer and Vice President, Group Public Affairs Division and Commercial Division was approved by the Board of Directors No. 7/2015 to be appointed as a replacement for Mr. Piya Viriyaprapaikit positions since 17 June 2015 onward. However, Mr. Nava Chantanasurakon, considered as an employee of the Company, shall not receive the meeting allowance as a Board of Directors and a Member of the Nomination and Remuneration Committee remuneration. Mr. Win Viriyaprapaikit, Director, Group Chief Executive Officer, Group Executive Officer and the President, considered as an employee of the Company, shall not receive the meeting allowance as a Board of Directors. The Chairman of the Board of Directors and Deputy Chairman of the Board of Directors, who are already entitled remuneration for their full-time performance, shall not receive the meeting allowance.

Remunerations for Full-time Performance of Chairman of the Board of Directors and Deputy Chairman of the Board of Directors in 2015 No.

1. 2.

Name and Position of Director

Remuneration for Full-time Performance (Baht)

Mr. Wit Viriyaprapaikit Chairman of the Board of Directors Mr. Somchai Sakulsurarat Deputy Chairman of the Board of Directors

3,600,000 2,400,000

Remuneration of Independent Directors of the Company Who Hold Directorship in the Company’s Subsidiary in 2015 No.

Name of the Company’s Independent Directors Who Hold Directorship in the Company’s Subsidiary

Position in the Subsidiary

Meeting Allowance in 2015 (Baht)

Director Director

150,000 150,000

Chairman of the Board of Directors

360,000

West Coast Engineering Company Limited 1. Mr. Somchai Sakulsurarat 2. Mr. Tongchat Hongladaromp Prachuap Port Company Limited 1. Mr. Somchai Sakulsurarat

1.7 Remunerations for executives in a position of Vice President and higher in the form of salaries, retirement compensation, vehicle allowances, insurance premiums and traveling allowances, for 6 people plus the President, totaled Baht 36,645,098 for the year.

2. Other Remunerations Contributions to the provident fund for executives in a position of Vice President and higher, for 6 people plus the President, totaled Baht 2,860,574 for the year.


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Organisation Chart

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Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Organisation Chart

063

Board of Directors

Organisation Chart Risk Management Committee

Nomination & Remuneration Committee

Audit Committee

Good Corporate Governance Committee Office of the Chairman • Corporate Secretariate Office

Group Chief Executive Officer Group Internal Audit Office

Management Committee • • • • •

Upstream Business

HRC Business

Downstream Business

• Sahaviriya Steel Industries Public Co., Ltd.

• Thai Cold Rolled Steel Sheet Public Co., Ltd. • Thai Coated Steel Sheet Co., Ltd.

Group Technology Office Group Finance and Accounting Office Group Risk Management Office Group Information Technology Office Group Corporate Strategy Office

• • • •

Group Purchasing Office Group Legal Office Group Public Affairs Office Group Human Resources Office

Engineering Business

Port Business

• West Coast Engineering Co., Ltd.

• Prachuap Port Co., Ltd.

President

Commercial Division

Commercial

Finance and Accounting Division

Innovation

Supply

Finance

Sales 1

Products & Market Development

Central Planning

Treasury and Credit Sales

Sales 2

Technical Service

Overseas Commercial

Sales 3 Sales 4 Sales Planning & Franchising Sales Operation

Accounting

Human Resources & Administration Division Human Resources & Administration (BKK)

Human Resources & Administration (BSP)

Manufacturing Division

Operation

Maintenance

Finance & Accounting

Human Resources & Admin. (BKK)

Welfare & Employee Relations

Production & Planning Control

Electrical Maintenance

Safety & Environmental

Management Accounting

Training & Development (BKK)

Human Resources & Admin. (BSP)

HSM Production

Mechanical Maintenance

Warehouse

HFL & PO Production

Utility and Fluid

Cost Accounting

Slab & Coil Yard


064

Good Corporate Governance Committee’s Report for 2015

Good Corporate Governance Committee’s Report for 2015

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

The Good Corporate Governance Committee (the “Committee”) was established in accordance with the resolution of the Board of Directors’ meeting No. 7/2007 held on 3 December 2007. The Committee currently consists of three members of the Company’s directors namely Mr. Kamol Juntima (director) as chairman, Mr. Yarnsak Manomaiphiboon (independent director and member of the Audit Committee) and Mr. Pichai Eursirisub (independent director).

The duties and responsibilities of the Committee are: • To propose any revision of the Company’s policy and guidelines concerning good corporate governance to the Board of Directors and to oversee the implementation of company management in accordance with the approved policy and guidelines; • To provide an opinion to the management regarding corporate social responsibility (CSR) and to monitor the management in establishing a clear action plan regarding CSR, as well as to follow up on the implementation of the plan with the management and then submit the results to the Board of Directors; • To propose to the Board of Directors an opinion on any revisions and updates of the Company’s business philosophy, code of business conduct, code of ethics for directors, code of ethics for executives and employees, and guidelines concerning the same as it deems appropriate. These tasks are to ensure that the Company maintains its sustainable and effective development of good corporate governance practices and is in compliance with the rules and procedures for a listed company. In 2015, the Committee held four meetings to carry out its allotted duties and submitted a summary of reports to the Company’s Board of Directors as follows: 1. Revision of the determination of a significant amount of commercial or business transactions between the Company, its subsidiaries and their customers, suppliers, debtors and creditors. This was then used to establish the criteria of reporting the interests of the Company’s directors and executive officers in 2015. The above complies with the Board of Directors’ guidelines regarding the rules and procedures of reporting on conflicts of interest of the directors and executives of the Company which became effective on 1 July 2009. 2. Revision of the draft amendment of the Board of Directors’ guidelines regarding the use and protection of inside information for trading of the Company’s securities (Revision No. 4) became effective on 2 March 2015. The proposed revision is to adjust the silent period that the directors and executives must not buy or sell or transfer the Company’s securities, which they, their spouses and minor children hold, for a period of one month starting from the end of each fiscal quarter and ending after one full day of trading following a public disclosure of the Company’s quarterly or annual results. 3. Conducted the Good Corporate Governance Committee’s self-assessment for 2015 using the self assessment of committee as a whole form issued by The Stock Exchange of Thailand and considered the draft self-assessment report for 2015 of 3 Committees: the Risk Management Committee, the Nomination and Remuneration Committee and the Good Corporate Governance Committee and submitted it to the Board of Directors. 4. Revision of the Board of Directors’ policy and guidelines regarding anti-corruption which became effective on 28 February 2014 along with acknowledgement an example of related law on anti-bribery and anti-corruption, the various offences and penalties for such offences, and submitted them to the Board of Directors for its consideration and acknowledgement.


Good Corporate Governance Committee’s Report for 2015

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5. Consider the Company’s self-assessment results on Corporate Governance for 2015 - 2016 based on the Principles of Good Corporate Governance for listed companies 2012 set out by the Stock Exchange of Thailand. 6. Intensive supervision of the corporate social and environmental responsibility activities conducted by the Public and Community Relations Office and the Safety and Environment Office. There were in total 42 social and community development activities with a total budget of Baht 7,356,315.08, and 23,098 beneficiaries. 7. Acknowledgments of various reports that are deemed beneficial to the Committee in monitoring the Company’s management on the implementation of the approved policy and guidelines concerning good corporate governance. The following were reported to the Company’s Board of Directors: 7.1 Report on shareholding and securities trading of the Company’s executives including Vice Presidents, Assistant Vice Presidents, department managers of the Finance & Accounting Division and the section manager of the Investor Relations Department, Group Finance Office. This was undertaken in order to prevent any insider trading of the Company’s securities. 7.2 Report on the interests of the Company’s directors and executives including the President, Vice Presidents and Assistant Vice Presidents. 7.3 Report on the progress in preparation for entering the certification process of Thailand’s Private Sector Collective Action Coalition Against Corruption Project (CAC). On 27 January 2016, the Company acknowledged the CAC Committee’s resolution that the Company has already passed the certification process and became a member of CAC. 8. Acknowledgement of the result of evaluation from regulators: 8.1 Letter from Thaipat Institute No. Tor Por 581007 regarding results on the sustainable development progress assessment on anti-corruption development for listed companies 2015, dated 7 October 2015. The Company achieved at Level 3 - Establishment of anti-corruption measures, an improvement from last year which was at Level 2 - Declared for Anti-corruption progress indicator. 8.2 Letter from CSR Club of Thai Listed Companies Association No. 289/2015 regarding results on the Corporate Sustainability Reporting Awards 2015, dated 23 November 2015. There were 106 companies submitting their sustainability reports for review. The Company was one of nine companies honored the Recognition Awards. 8.3 Letter from The Stock Exchange of Thailand No. Por Thor Tor (Wor) 1/2015 regarding results on the Corporate Governance Report of Thai Listed Companies 2015 (CGR) dated 19 October 2015, rated by the Thai Institute of Directors. The Company was rated “Very good”, the same score as last year. 9. Others 9.1 Regular monitoring of the progress and results from the implementation of the resolutions of the Committee. 9.2 Consideration of whistle blower report and execution. 9.3 Revision of the information disclosed to the SET and the SEC, as published in the Annual Information Disclosure form ended 31 December 2015 (Form 56-1) and in the 2015 Company Annual Report (Form 56-2) regarding the good corporate governance report. Since 2013, the Company has also disclosed a report on anti-corruption practices in the Corporate Social Responsibility Report. 9.4 Report to the Board of Directors on the Committee’s activities for the year 2015. The Board of Directors and the Good Corporate Governance Committee are committed on raising the Company’s level of good corporate governance and corporate social responsibility to international standards. We aim to achieve sustainable development and to increase its value and protect the interests of all stakeholders with transparency, fairness, integrity, and dedication. The Committee also has significant responsibilities for environmental protection, preservation, as well as social responsibility and community development.

Mr. Kamol Juntima

Chairman of the Good Corporate Governance Committee 19 February 2015


066

Good Corporate Governance

Good Corporate Governance

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Good Corporate Governance Policy The Board of Directors at Sahaviriya Steel Industries Public Company Limited are well aware of their role, responsibilities and fiduciary duties assigned to them by the Company’s shareholders. The shareholders expect the Board of Directors to govern the Company to ensure efficient and transparent management that creates trust and confidence amongst all stakeholders. The Company conducts its business by adhering to the principles of good corporate governance and business ethics in order to lead the Company’s businesses to develop and prosper at a stable and sustainable rate. The Board of Directors has continuously been taking the good corporate governance of the Company seriously since the adoption of a good corporate governance policy as the principles of management accomplishment in 2002. They subsequently revised the policy in late 2007 to raise the standard of the corporate governance of the Company and to conform to the best practices as required by the Office of the Securities and Exchange Commission and the Stock Exchange of Thailand. In 2013, the Corporate Governance Center of the Stock Exchange of Thailand announced the Principles for Good Corporate Governance for Listed Companies 2012 which were revised to be compatible with ASEAN CG Scorecard criteria and international best practices based on the Principle of Corporate Governance of the Organisation for Economic Co-operation and Development (OECD Principles of Corporate Governance) thus helping Thai listed firms to have their common stocks considered as one of the ASEAN asset classes. The principle comprises of 5 categories, namely: 1. Rights of Shareholders 2. Equitable Treatment of Shareholders 3. Role of Stakeholders 4. Disclosure and Transparency 5. Responsibilities of the Board of Directors


Good Corporate Governance

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067

To ensure the Company’s vigorous implementation, as prescribed in the aforementioned policy, the meeting of the Board of Directors in December 2007 resolved to establish a Good Corporate Governance Committee as a sub-committee to assist the Board of Directors on good corporate governance matters. The Good Corporate Governance Committee consists of 3 directors with a 3 years term of office. Although the Chairman of the Good Corporate Governance Committee is not an independent director, the other two committee members are independent directors. The meeting of the Good Corporate Governance Committee in February 2013 resolved to have the Company amend the good corporate governance policy to comply with the Principles of Good Corporate Governance for Listed Companies 2012. The Board of Directors aims for the enhancement of good corporate governance within the organisation, which requires the collaboration of four parties, namely the Board itself, the Company’s management, the Company’s independent auditors, and the Company’s internal auditors. In order to enable the Company to achieve the above objectives and be adopted to conform to the SEC’s and SET’s principles of good corporate governance for listed companies, the Board of Directors meeting No. 10/2014 on 18 September 2014 resolved to cancel the Board of Directors’ policy No. 1/2007 regarding the Good Corporate Governance Policy which became effective on 3 December 2007 and promulgate the Good Corporate Governance Policy as detailed below. 1. The Board of Directors emphasises its responsibility to Principles 1 - 3: protect the rights and interests of • Rights of Shareholders shareholders, to promote the rights • Equal Treatment of shareholders as provided by of Shareholders laws, and to treat shareholders equally as well as provide each of them with equal access to corporate information.

2. The Board of Directors shall ensure that shareholder meetings and disclosures of corporate information are conducted in accordance with the laws and the guidelines laid down by the Securities and Exchange Commission and The Stock Exchange of Thailand. 3. The Board of Directors shall ensure that guidelines concerning the use and protection of insider information for trading of the Company’s securities are implemented and thoroughly communicated to all relevant parties. 4. The Board of Directors shall attend to the rights of stakeholders 4 - 6: and oversee that the Company’s • Principles Rights of operations are conducted in stakeholders compliance with all relevant laws. 5. The Board of Directors gives special importance to uphold its corporate social responsibility, and especially in regard to those impacts from the business of the Company. To ensure that the business of the Company takes into account environmental, community and societal factors for sustainable development as well as communicated to all stakeholders. 6. The Board of Directors believes the anti-corruption policy to be important, and shall oversee and monitor the implementation of the Anti-corruption policy and guidelines. The Company shall not accept or involve in any type of corruption either directly or indirectly.


068

Good Corporate Governance

7. The Board of Directors emphasises the transparency of Principles 7 - 8: its business operations, whereby • Information and conflicts of interest between the Disclosure Transparency Company and its shareholders, and directors, employees, shareholders, and other stakeholders will be eliminated. The Board shall oversee and monitor procedures on conflicts of interest in ways that are scrupulous, honest, reasonable, independent, and moral. Stakeholders with interests in any transaction must not participate in decision making relating to such transactions, and decisions must be made based on the benefit to the Company and its shareholders. Transaction-related information must be disclosed correctly, completely, and promptly. 8. The Board of Directors shall ensure that investors will have confidence in such a way that disclosures of corporate information are accurate, complete, and promptly. 9. The Board of Directors must consist of no less than three Principles 9 - 17:  independent directors. • Responsibilities Board of 10. The Board of Directors ofDirectors may establish various committees, whose purpose is to perform the tasks assigned by the Board of Directors, and to study or consider matters before submitting them for consideration to the Board. These committees are the Audit Committee, Nomination and Remuneration Committee, Good Corporate Governance Committee, and Risk Management Committee. Other committees may be established as required for ensuring efficiency, fairness, and transparency of the directors’ work. 11. The Board of Directors has seen fit to divide the functions of the Chairman of the Board of Directors, the Group CEO, and the President, among separate and different individuals, with the authority and duties of each position being clearly defined. It has also seen fit to adjust the Manual of Authorization Chart from time to time to clarify the scope of authority to be exercised by the Board and by those in management who have been assigned authority. 12. The Board of Directors are responsible for determining the Company’s vision, mission, and business

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

strategies which must be reviewed periodically as well as ensuring that management conducts company business according to these plans. 13. The Board of Directors emphasises its responsibility to oversee risk management and internal control systems of the Company, and the Board has established an independent Office of Internal Audit within the Company. 14. The Board of Directors shall commit to the Company’s business philosophy and shall ensure that the Company’s operations are conducted according to the Company’s business ethics, a code of ethics for directors, a code of ethics for employees, and shall inform relevant parties. 15. The Board of Directors must hold regular meetings at least once a month, and other special meetings may be held at other times if necessary. Each meeting must be arranged in advance, along with a clear agenda for the meeting. All documents necessary for the meeting must be prepared and sent to board members, as written in the Company Articles, so that they have sufficient time to peruse the documents before the meeting. 16. Each sub-committee must have meetings on a regular basis: the Audit Committee, the Good Corporate Governance Committee and Risk Management Committee must have meetings at least once every three months, and the Nomination and Remuneration Committee must have meetings at least twice a year. Other special meetings may be held at other times if necessary. Each meeting must be arranged, along with a clear agenda for the meeting. All documents necessary for the meeting must be prepared and sent to the Board / Committee members, so that they have sufficient time to peruse the documents before the meeting. 17. The Board of Directors is responsible for considering remuneration for company directors, Group CEO and president as proposed by the Nomination and Remuneration Committee. Remuneration for Group CEO and president is determined by a resolution made at the Board of Directors meeting, and any other remuneration for directors is determined by a resolution made at a shareholder meeting, whereby the amount of remuneration is considered appropriate, transparent and has no conflicts of interest. 18. This policy shall be regularly reviewed and updated as necessary and appropriate.


Good Corporate Governance

19. The guidelines to define the details / rules / practices in accordance with the policy will be issued as appropriate, however, those announcements or guidelines issued by virtue of the previous Good Corporate Governance Policy, dated 3 December 2007 will remain in force as far as it does not conflict with this policy or until further notice or new guidelines is issued by the enforcement of this policy. In 2015, the Company received the assessment results related to good corporate governance activities as follows: • The Company’s Corporate Governance Report was rated by the Thai Institute of Directors (IOD) in cooperation with the Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET). The Company received a “Very Good” accomplishment in the Corporate Governance Report of Thai Listed Companies 2015, the same score as last year. • The Company was evaluated by the Office of the Securities and Exchange Commission, in cooperation with Thai Investors Association and Thai Listed Companies Association, on the quality of the Annual General Meeting for the year 2015. The Annual General Meeting of shareholders No. 26 for the year 2015 was rated “Excellent”, the same result received for the years 2008 - 2014.

Compliance with the Company’s Corporate Governance The Company’s activities in 2015 to ensure compliance with the Good Corporate Governance Policy, with reference to the Organisation for Governance Economic Co-operation and Development (OECD) principles of Corporate Governance, can be summarised as follows:

1. Rights of Shareholders 1.1 Shareholders’ Meetings 1.1.1 According to the articles of association, the Company is required to hold an annual general meeting of shareholders within 4 months of end of each fiscal year. The Board of Directors may call for an extraordinary meeting of shareholders when it deems appropriate.

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An extraordinary meeting of shareholders may also be called upon when a number of shareholders whose aggregate shareholdings represent no less than one fifth of the total issued shares, or at least 25 shareholders whose aggregate shareholdings represent no less than one tenth of the total issued shares, propose in writing with reasons and clear objectives specified. In 2015, the Board of Directors meeting No. 3/2015 held on 27 February 2015 approved the date of the Annual General Meeting of Shareholders No. 26 which was held on 20 April 2015. In each shareholder’s meeting, the Board of Directors is aware of the shareholders’ rights in compliance with the Company Articles of Association, pertinent legislation, and the regulations of The Stock Exchange of Thailand (“SET”). The Company has to notify the date of determining the names of shareholders entitled to attend the shareholders’ meeting (Recorded Date) and compile the names of entitled shareholders under section 225 of the Securities and Exchange Act B.E. 2535 and its amendments in the Securities and Exchange Act (No. 4) B.E. 2551 by closing the share register at the SET no less than 14 days prior to its closing date. 1.1.2 The Company issued a notification of the meeting clearly specifying the meeting’s agenda with sufficient details for each agenda and opinions of the Board of Directors on them together with significant information for consideration prior to decision making. For example:


070

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Good Corporate Governance

The 2014 annual report to allow the shareholders to have adequate information on their voting rights and other supporting documents; A copy of the Minutes of the Annual General Meeting of Shareholders No. 25 held on 28 April 2014. The Company’s Articles of Association regarding the part relating to the shareholders’ meeting; A proxy form; A list of documents and evidence to be presented by the shareholders at the shareholders’ meeting; Instructions on how to attend the annual general shareholders’ meeting No. 26 and a map of the meeting venue. The notification and relevant documents were sent in advance to Thailand Securities Depository Company Limited (TSD) for further distribution to all shareholders 18 days before the Annual General Meeting of Shareholders No. 26. 1.1.3 The Company also provided notification of the shareholders’ meeting and all supporting documents, especially those for decision-making at the meeting, on the Company’s website, both in Thai and English, 33 days before the Annual General Meeting of Shareholders No. 26. This was to facilitate the shareholders with quick and easy access to essential information of the meeting and to allow them sufficient time for consideration before the actual documents were delivered. Shareholders’ Meeting

Date of Meeting

1.2 Convenience of Shareholders 1.2.1 The Board of Directors takes into consideration the convenience of the time and place of the meetings of its shareholders. The Annual General Meeting of Shareholders No. 26 was held on 20 April 2015 at 14.00 hrs. at the Crystal Ballroom, Tawana Hotel, 80 Surawongse Road, Suriyawong, Bang Rak, Bangkok. This venue can be accessed easily, conveniently and fast via the Bangkok Mass Transit System (BTS) and Metropolitan Rapid Transit (MRT). At the meeting venues warm hospitality is offered to all shareholders by having staff in place to welcome and assist the shareholders in the registration process. Registration is open 2 hours in advance of the meeting to allow shareholders sufficient time. In addition, a computerised system was used to search and verify shareholders’ identities in order to improve the speed of the registration process. Since the Annual General Meeting of Shareholders No. 23, the Company has introduced a Barcode System of registration result in the effectiveness, convenience and accuracy of the process. 1.3 On the Day of the Shareholders’ Meeting 1.3.1 Board of Directors’ attendance in the shareholders’ meetings Board of Directors’ Attendance Attended / Total Absent

Annual General Meeting 20 April 2015 7 / 11 directors of Shareholders No. 26

1) Mr. Tongchat Hongladarom 2) Mr. Siripol Yodmuangcharoen 3) Mr. Somchai Pipitvijitkorn 4) Mr. Piya Viriyaprapaikit

1.3.2 The chairman of the meeting allotted sufficient time for the shareholders to express their opinions and make inquiries at the meeting. The Chairman of the Board of Directors, the Vice Chairman of the Board of Directors, the chairmen of various sub-committees, directors, the President and the senior management of the Company were present to answer questions pertaining to their particular functions. The shareholders were also encouraged to freely propose ideas and suggestions to the Board of Directors. 1.3.3 The Company assigned two independent representatives from KPMG ,the external auditor, to witness the Annual General Meeting. In addition, for the Annual General Meeting of Shareholders No. 26, the Company provided the shareholders an opportunity to submit questions concerning the Company’s operational results in advance. This measure has been in place since the Annual General Meeting of Shareholders No. 18. Shareholders can communicate with the Company via e-mail address: agm26@ssi-steel.com or by mail to the Chairman of the Board of Directors, the Deputy Chairman, directors, the President or the Company Secretary within a specified time period.


Good Corporate Governance

1.4 Disclosure of Minutes on Shareholders’ Meeting 1.4.1 The Company Secretary prepares and discloses the minutes of each shareholders’ meetings to the Stock Exchange of Thailand on the same day of the meeting. For the Annual General Meeting of Shareholder No. 26 held on 20 April 2015, the Company additionally disclosed the vote count of each resolution of the meeting, analysed by the number who agreed, disagreed or abstained. The minutes of the meetings were made within the period stipulated by law after each meeting. The minutes contained a list of attending and nonattending directors and executives, the voting methods, a summary of announcements, explanations, observations, questions, and answers. Moreover, The Company submitted the minutes of the shareholder’s meeting No. 26 to The Stock Exchange of Thailand on 20 April 2015 at 21.05 hrs and disclosed online to the public on the Company’s website at http://www.ssi-steel.com on 6 May 2015, within 16 days of the shareholder’s meeting. 1.4.2 The Company Secretary has supervised and filed the minutes and notices of the shareholders’ meetings since the Company was founded.

2. Equitable Treatment of Shareholders 2.1 Right of Shareholders to Propose Meeting Agenda and Nomination of Directors 2.1.1 At the Annual General Meetings of Shareholders, the Company provides minority shareholders an opportunity to suggest what they consider important and constructive matters which can be included in the meeting agendas. They are also given the right to propose qualified candidates for the position of Company Director. The proposal must be submitted in compliance with the time frame, conditions, and guidelines published on the Company’s website at http://www.ssi-steel.com. 2.1.2 In preparation of the Annual General Meeting of Shareholders No. 26 held on 20 April 2015, the Company notified to The Stock Exchange of Thailand on 29 August 2014 regarding the rights of shareholders to propose an agenda of the shareholder’s meeting as well as the right to propose qualified candidates to be nominated as a director. The proposal must be submitted in advance 1)

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071

via e-mail to agm26@ssi-steel.com; or by regular mail to the Company Secretary within a specified period, and in compliance with the guidelines published on the Company’s website at http://www.ssi-steel.com. 2.1.3 In preparation of the Annual General Meeting of Shareholders No. 27 planned to be held on 20 April 2016 1), the Company disclosed to The Stock Exchange of Thailand on 28 August 2015: The right of minority shareholders to propose matters considered important and constructive as agenda items at the shareholder’s meeting and to propose qualified candidates to be nominated as a Company director and on 13 November 2015: the right of shareholders to submit questions in advance before the date of the Annual General Meeting of Shareholders No. 27 for the year 2016. The shareholders had to propose the matters via an e-mail address: agm27 @ssi-steel.com or by mail to the Company Secretary within a specified period in compliance with the guidelines and procedures stipulated by the Board of Directors of the Company. In cases when the Board of Directors approved the proposed matters, or the proposed matters were pursuant to the law, the Company Secretary included such matters as an agenda item of the meeting in the notification of the Annual General Meeting of Shareholders No. 27 and clarified and answered the questions at the meeting. 2.2 Proxy The Company enclosed 3 types of proxy forms as provided by the Ministry of Commerce with the notification of every shareholders’ meeting so that shareholders can have the opportunity to exercise their voting rights without attending in person. Shareholders are able to freely use any proxy form for their requirements. Since the Extraordinary General Meeting of Shareholders No. 1/2004 held on 18 November 2004, the Company has provided an alternative Proxy Form B as provided by the Ministry of Commerce, which allows the shareholders to appoint an independent director to attend and vote on their behalf. The people determined by the Company for the proxy for the Annual General Meeting of Shareholders No. 26 comprised 3 directors: 1 independent director, 1 non-executive director and 1 executive director or any other person designated by each shareholder.

As the Court issued an order for the Company’s Business Rehabilitation on 10 March 2016, the Company will not be required to hold the Annual General Meeting until the Company exits Business Rehabilitation.


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Good Corporate Governance

2.3 Procedures on the Day of the Shareholders’ Meeting 2.3.1 Before the meeting starts, the Chairman of the Board of Directors acting as the Chairman of the Meeting informs the shareholders of their rights according to the Company’s Articles of Association, the meeting procedures and the voting procedures. 2.3.2 The Chairman of the meeting ensures the meeting complies with the Company’s Articles of Association for the meeting and conducts the meeting in accordance with the agenda as indicated in the meeting notification. If there is a proposal to rearrange the order of agenda, the Chairman of the Meeting will be able to change the order as proposed after receiving approval from no less than two thirds of the attending shareholders. However, up to 2015, there has never been a request to rearrange the order of agenda, nor has there ever been a request by one third of the votes to introduce other matters not previously listed in the agenda. Moreover, the Company has never added any other items to the agenda apart from those indicated in the notification of the meeting. 2.3.3 The Company has specified the voting procedure should be by the use of ballots in every agenda. In the election of directors, a majority vote must be obtained in accordance with the following rules and procedures: 1) Each shareholder has a vote equal to the number of shares he/she holds. 2) Each shareholder must cast his/her entire vote according to 1) to elect one or more candidates to be the director. In case of electing more than one candidate to be a director, each shareholder must cast his/her entire vote according to 1) for each candidate. The vote cannot be divided for any candidate. 3) The candidates who receive the most votes, in descending order, will be elected as directors depending on the number of positions available. If candidates receive equal votes for the last available position, the Chairman of the Meeting shall cast the deciding vote.

3. The Rights of Stakeholders The Board of Directors of the Company approved the business philosophy and business ethics, as proposed for revision in 2010. The approved philosophies are to be the

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

principles, beliefs and guidelines for the Company and its personnel to adhere and implement to allow the Company identity to be developed and values given to all groups of stakeholders. This will be a vehicle to drive the Company’s existence, development and sustainable growth. Business Philosophy of the Company The management of the Company leading to the goal of sustainable growth is based on fundamental business philosophies composed of: 1. Devotion to excellence 2. Adherence to quality of products and services 3. Belief in the value of personnel 4. Commitment to ethics 5. Dedication to social responsibilities The business plan for 2014 to 2016 consisted of: 1. Vision and Mission, Business objectives and Values 2. Global Economic Prospects 3. SWOT Analysis 4. Business opportunities and trends 5. Strategy Statement and Project The Management Committee reviewed the Vision and Mission of the Company and gave a preliminaly opinion that it should remain unchanged as the Company remain committed to developing products and services to provide added value for customers. Thus creating shared value with stakeholders through the supply chain and also remain consistent with the Company’s business philosophy, as follows:


Good Corporate Governance

“Innovate premium value steel products and services for customers; generate consistent profit and sustainable value for stakeholders.” Business Ethics of the Company In conducting the business, the Company adheres to the principles of accountability, transparency, integrity, and business competitiveness by acting in the best interest of all stakeholders in an equitable manner as follows: 1. Shareholders The Company realises the shareholders are the owners of the Company and the Company has the duty to generate added value to the shareholders in the long term. The Company has therefore stipulated guidelines for the directors, executives, and employees to perform the following: 1) Perform duties to their fullest capacity with integrity, care, prudence and fair treatment for the best interest of all shareholders. 2) Present the operating performance report, financial status report and other reports with accuracy and completeness and in a timely manner. 3) Report the trend of the Company, on both the positive and negative sides, to all shareholders in an equitable manner based upon sufficient factual basis, quantitative information and rationale. 4) Ensure that there is no exploitation of undisclosed information or any wrongful action for improper advantage for oneself, or others, which may cause conflicts of interest for the Company. 2. Customers The Company values the vital role and satisfaction of customers which contribute to the success of the Company’s businesses. Therefore, the Company has the strong intention to pursue methods that are reliable for customers and that can fulfill the needs of customers in a more efficient and effective manner. The guidelines are as follows: 1) Deliver quality products and services that meet or exceed the expectation of customers. 2) Communicate with customers with courtesy and ensure that complete, accurate and up to date information on products and services is given to customers. The Company will not misrepresent the products and services in terms of quality, quantity or any other condition.

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3) Strictly follow the conditions applied by the customers. If the conditions cannot be satisfied, the Company will inform the customers without delay to find a possible solution together. 4) Establish a system and channel that allows customers to make complaints about quality, quantity and safety of products and service, and respond to the complaints in a timely manner. 5) Strictly protect confidential information of customers and not use their information for any other interest or in any improper respect. 6) Provide instructions on the use of products and services in an efficient manner to maximise benefits. 3. Suppliers The Company realises that ethical conduct with suppliers should be based on fair benefits to both parties. Thus, the Company commits to provide facts and accurate reports, act in accordance with agreements, negotiate and seek solutions based on business relationships as well as avoiding situations which may result in a conflict of interest. The guidelines are as follows: 1) Never request, receive or pay any fraudulent benefits from or to suppliers. 2) Where there is evidence indicating a fraudulent benefit has been claimed, received or paid, disclose the relevant information to the suppliers and together find a solution in a timely manner. 3) Strictly perform in accordance with the conditions of agreements and inform the suppliers in advance if any conditions cannot be met. 4. Competitors The Company is committed to treating its competitors fairly. The guidelines are as follows: 1) Never seek any confidential information of the competitors by unfaithful or improper means. 2) Never damage the competitors’ reputation by offensive accusations. 5. Employees The Company realises that its employees are a valuable resources for the success of the Company; thus the employees are treated fairly in terms of compensation, opportunity, development, and potential based on


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humanitarian practices regardless of their race, religion, gender or physical condition. The guidelines are as follows: 1) Treat employees with respect, value and dignity. 2) Provide fair compensation to employees. 3) Provide a safe working environment to employees considering their lives and property at all times. 4) Appoint, rotate, promote and demote employees with sincerity, based on their knowledge, merit and suitability. 5) Value the development of knowledge and ability of all employees. 6) Avoid any unfair action which may affect the job security of employees or any action which may threaten or cause pressure to the mental health of employees. 6. Supervisory Authorities The Company values its duty to comply with the law and business practices. The Company strictly conducts its business under laws, articles, regulations and standards imposed by supervisory authorities as well as cooperating with supervisory authorities on relevant matters. 7. Social and Community The Company recognises its accountability towards society and the community as the core of its business with full realisation of the possible effect on natural resources and the environment. It has constantly provided support to a number of activities to improve the society and community, safeguard and rejuvenate natural resources as well as to enhance community capacities in an effort to bring about sustainable development. The Company is concerned about the quality of life of all stakeholders, including employees and their families, the society, and the community. The Company aims to develop its steel industry in parallel with the quality of the society and its communities and the environment. This commitment to sustainable development involves the establishment of effective systems of management for safety, occupational health, and the environment in accordance with ISO 14001 Environmental Management System Standards and TIS 18001 Occupational Health and Safety Management Standards with the purpose of reducing and controlling the risk of any damage occurring

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

to the employees and stakeholders and to improve the safety of the Company’s operations. In 2015, the Company received awards under various categories which its details can be found in the Corporate Social Responsibility Report. 3.1 Equitable Treatment of Stakeholders In conducting its business, the Company places an importance on all stakeholders: the shareholders, customers, suppliers, competitors, employees, supervisory authorities, the society and community as stated in the Company’s Business Ethics. The Company has therefore established a mechanism to encourage activities and improve the relationship between the Company and its stakeholders, for example: customer’s opinion surveys; employee engagement surveys; hearing and Q&A session at the shareholders’ meetings; channel for the stakeholders to raise questions and suggestions on the website; channel to inform or make a tip-off or complaint to the Good Corporate Governance Committee; community products and service promotion; and a buyer meet seller seminar in 2015. In addition, the Company has ensured adequate disclosure of related information to efficiently encourage participation from stakeholders; for instance, publishing product procurement news of the Company on the website to inform business partners and interested parties. Furthermore, department, committee, working committee or sub working committees, specifically those in charge of assignments are set up to take care of every stakeholder. The activities below illustrate the Company’s commitment to ascertain equitable treatment of each stakeholder in the year 2015. 3.1.1 Stakeholder: Shareholders • The Corporate Secretary Office performed duties delegated by the Board of Directors. 3.1.2 Stakeholder: Customers • The Company put its customers’  satisfaction first through its commitment to continuously developing high quality products and quick services. The Company has adopted management systems for quality, environment, health and safety i.e. ISO 9001, ISO/TS 16949, ISO 14001, TIS/OHSAS 18001 in its operation to deliver products and services that satisfy its customers. The Company offered a responsive


Good Corporate Governance

process to customer needs across various channels, to effectively listen and help understand customer’s needs and expectations i.e. customer visit, monthly meeting, training, providing advice and assisting customers with  issues related to its products. • The Company has a complaints handling process. If the customer was not satisfied with the product, the customer can feedback via the channel provided. All complaints will be recorded in the system and have to be preliminary responded within two days and immediately informed customer upon completion. There’s also the satisfaction rating process and customer engagement survey to obtain an information to continue improving its products, services and system so that the Company can exceed its customer expectations. • Working Committee for Innovation of Value Added Steel Products and Services for the customers conducted a customer requirement analysis and cooperated with the Production Division to improve the value-added aspects of the products and services development for the customers. In 2015, the Company launched the new value-added products i.e. Extra Strength Steel, and services i.e. product size control to increase customer’s productivity and reduce the unnecessary loss of customers, ultra fast delivery for its urgent order to support customer. In 2015, the Company delivered innovative value-added products to customers for 14% of its total volume and increased a market share for high quality hot rolled steel sheet in coil in automotive industry to replace those imported steel from Japan by 15%. 3.1.3 Stakeholder: Suppliers and creditors • The Company focused on its supplier as a key stakeholders to help each other in the business. The Company treats all supplier equally on the basis of fair competition, respecting each other, building relationships and good cooperation, and strict compliance with contractual  terms. The Company has featured in the procurement process, which is a key to control costs, products and services quality. The procedures for procurement are set to ensure transparency, auditability and benefit maximisation. • The Slab Suppliers Audit Working Subcommittee arranged activities to strengthen the relationship with suppliers through information and experience sharing amongst suppliers. The Company

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invited overseas suppliers to attend meetings with the Company, to review technical protocol and specifications in order to develop a greater variety of raw materials to improve response to the market requirements. The meeting helped define a solution for improving raw material quality and other problems. • The Group Purchasing Office has performed the following tasks: • Disclosing procurement news of the Company via http://www.ssi-steel.com to inform suppliers and interested parties wishing to sell products, and offer services of the Company. They are invited to register to become vendors directly to the Company or via the Company website, as well as submit procurement bids. This enables the Company to have an efficient and transparent procurement process. • Sourcing new suppliers and service providers on an ongoing basis in order to have suppliers, service providers and producers with high potential and ability to produce or sell high quality products that meet the Company requirements at an appropriate price and on time delivery. Every entrepreneur is treated equally. In 2015, the number of vendors have increased by 198. • Organising annual seminars and meetings with suppliers and service providers. In 2015, a meeting was held in March to clarify the Company’s procurement policy and its target, group procurement guidelines, other related issues on the procurement policy, the safety, occupational health and environment policy as well as the Anti-corruption policy and no-gift policy. • In 2015, the Company has procured Baht 1,502 million of goods from general suppliers, including energy products of Baht 995 million, spares of Baht 75 million, consumables of Baht 106 million, services of Baht 298 million and others of Baht 28 million. The Company also procured products from local communities in Bangsaphan area with a volume of Baht 177 million. In 2016, the Company expects its volume of procurement to rise by up to Baht 3,500 million from general suppliers and Baht 185 million from local communities. • Visiting the production process and management system of 13 general suppliers and 4 suppliers in Bangsaphan to review their production processes and product quality to ensure those products meet the Company


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requirements and expectations. In addition, suggestions will be made on an improvement of quality and delivery of those products and services. • Assisting to promote and support the products produced or distributed by the community and the services they render. Projects have been in place to support and develop the products produced by the Bangsaphan community in accordance with the Company’s corporate social responsibility policy. • The Company has policy to treat all creditors fairly and equally. The Company strictly abided by all terms of any loan agreement with its creditors and financial institutions in a responsible and transparent manner including the purpose of lending, repayment, collateral treatment. It will not conceal any information or hide any facts that might possibly result in the realisation of losses for its creditors. If the Company is unable to meet any of the criteria it agreed to, it must immediately notify its creditors to jointly solve the problem. 3.1.4 Stakeholder: Competitors • The Company recognises the importance of conducting its business with competitors fairly and ethically. There is a policy in place to not gather confidential information of the competitors by unfaithful or improper means and not to destroy the reputation of the competitors by offensive accusations. • HRC producers in Thailand have gathered and form the Thai hot rolled steel association. The meetings among members was held to allow knowledge sharing, strengthen relationships and help promote the  enterprise. The association also cooperated with the government in promoting trade and industrial cooperation as well as production development to produce in sufficient  quantities to serve needs of both domestic and international market. 3.1.5 Stakeholder: Employees • The Human Resources and Administration Division is committed to following the Company’s business philosophy which places an importance on the value of personnel and that the quality employees contribute to the success of the organisation. Hence, the Company has always arranged appropriate employment conditions that provide suitable compensation for the employees in order to encourage motivation. A number of welfare benefits are

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

initiated in various forms. The Company provide: provident fund, health insurance, life and accident insurance, training and seminars for employees, scholarships, special low interest rate loan program with Government Housing Bank and transportation services to and from SSI Bangsaphan Plant, food court at Bangsaphan. The Company supported for activities of employee’s saving cooperatives and establishment of cremation welfare group. The Company values the importance of employee welfare and benefits as well as the quality of life of employees and their families. This can be seen from the National Outstanding Industrial Establishment Award in Labour Welfare/Relations Category in 10 consecutive years type (2006 - 2015). The Company’s human resource management and administration has been managed in accordance with policies and procedures regarding human resource management which became effective since 1994. These policies and procedures were amended to keep pace with the changes as appropriate. All employees can access these policies and procedures posted on information board and intranet. New employees are also introduced to the Company policies by new employee orientation program. The policies include the following: • The compensation management has been introduced since 2002 to motivate employees to perform their work more efficiently and be fair. Employee compensation is considered based on their preformance appraisal, 360-degree feedback from the people who work around them, individual contributions that add value to the Company and annual business turnover. • Benefits such as 1) housing loan, since 1999, to help employees and their family with housing assistance 2) rent allowances, since 2001, to help employees who was delegated to work at Bangsaphan plant with housing rent 3) hardship allowances for employees who was delegated to work at Bangsaphan plant as an incentive for living and working in Bangsaphan area 4) per diem allowances, accommodation and vehicles (Domestic), since 1997, to assist employees who have to work, attend training / seminar outside the office 5) uniform, since 2003, the Company provided a uniform for an employee for tidiness and safety in the workplace 6) group medical and health insurance, since 2008, to promote employees’ wellness and health and ensure


Good Corporate Governance

employees receive prompt medical care 7) compensation benefit in case of death, since 2001, to offer support and help relieve the suffering of employees or their family members in case of death 8) long service award, since 2000, to  promote long-standing careers within the Company and to strengthen corporate employee engagement through recognising and honouring the commitment and dedication of long term employees 9) shuttle bus service for employees, since 2005, to provide a convenient way for employees to travel to work at plant 10) home visit for sickness absence, since 2002, to express concerns and provide appropriate assistance for them and 11) leave entitlement for a death in the immediate family. Since 2015, employees were allowed to leave to attend the funeral of an immediate family. The Company provided benefits to all employees with the aim to provide appropriate level of both physical and mental well-being to employees, good health, safety at work, prosperity and stability in life, not only for the employees but also their family. • Provident fund, since 1999,  to provide employees with financial security and stability, a lump sum benefit at retirement or resignation as well as to provide security for their families in case of death of an employee. • Human resource development, since 2002, to give employees development opportunities by providing training, seminar, academic conference, study visit and etc. This will enable employees to enhance their knowledge, understanding and skill which result in effective performance. In 2015, the Company had an average training hours of 20.30 hours/person/year and a report of which was submitted to the Board of Directors on a monthly basis. The Company also provides a working environment that encourages the employees to be good, smart and socially accepted people which includes the “SSI Way” activities by creating role models for other employees to promote the desired values. The Company focuses on building relationships within the workplace under the “Care Organisation” project which comprises of several sub-projects for building close relationships for the employees. The sub-projects include: 1) Management meeting with employees, including those at SSI Bangsaphan Plant to communicate policies to employees of each division 2) Supervisor meetings with employees to provide job coaching that focuses on consulting an individual on

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both work and non-work related matters. 3) Employee meeting with employee, including a mentoring program for a new employee and a buddy program for good deeds. In addition, the Company focusses on creating a better work-life balance by encouraging the employees and their families to participate in activities with the Company. The Company realises that communication is a significant factor to success. The Company provides thorough channels including internal magazine, newspaper, wire broadcasting, internal TV, SMS, social network i.e. Facebook and effective communication skills training for supervisors. The Company aims at employee involvement and participation by setting up working committees to manage specific matters for the employees such as the Canteen Committee, the Recreation Committee, etc. Such projects demonstrate that the Company values its employees. The projects and activities have been carried out with the intention to develop employees to grow together with the Company through care and sustainable growth. 3.1.6 Stakeholder: Supervisory Authorities • The Company places emphasis on lawful and ethical working practices and strictly conducts its business in accordance with the law, articles, regulations and standards imposed by the authorities of which whether it be labour, employment, consumer, trade competitor, environment, intellectual property or copyright, anti-corruption or human right as well as cooperates with supervisory authorities. The directors, executives and employees at all levels are expected to carry out their work in a way that complies with the law in order to support the Company to be an efficient and ethical business. This is considered as an important mechanism that would result in the Company’s work processes and procedures being accurate, thoughtful and support it to achieve its objectives. As a result, over the past years the Company has never received punishment for delay disclosure of material matter within a period determined by the authorities or any other cause. The Company also adopted IT policy No. 4/2000 regarding computer virus dated 27 October 2000 which stated that all computer programs must be authorised by the Company before using, had a valid license, programmed by a well-known and trusted manufacturer or seller and well tested. The Group Legal Office quarterly presented a summary report on the Company’s legal


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compliance including compliance with the copyright act which reported by the Information Technology Office. 3.1.7 Stakeholders: Social and Community • Sahaviriya Steel Industries Public Company Limited applied business philosophy and ethics in its business by believing in the value of personel, caring for a good quality of employee’s life, having safe and hygienic the working conditions and dedicating to social and environmental responsibilities. The safety, health and environmental management system was considered to be crucial to business operations. The Company has committed to the safety, health and environmental management system by providing effective management system and supporting continuous improvement of the management system to comply with the safety, health and environmental requirements. • The Public and Community Relations Office undertook various activities as shown in the Corporate and Social Responsibility Report. • The Safety and Environmental Office and the Company are engaged in social and community contribution and environmental activities as follows: • The Company promulgated the safety, occupational health and environment policy signed by the President in 2015 to demonstrate its commitment to reducing and preventing work-related accidents and illness as well as saving resources and energy. The Company developed many project plans such as risk assessment, safety training, safety audit, work environment measurement, environmental monitoring and surveillance for employee and community,

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

check up by health risk factor, campaign for reporting and improving work environment, campaign to promote desired safe behaviors, emergency plan testing, awareness campaign on waste segregation and recycling which is the most effective waste disposal method, design, the process designed for wastewater recycling and etc. to follow the Standard for occupational health and safety management systems (TIS/OHSAS 18001). • The Company announced the energy policy signed by the Group Chief Executive Officer and the President in 2013, to demonstrate its commitment to appropriately improving the energy management system by preparing for ISO 50001 certification process. • The Company provided training for all employees and contractors in order to give knowledge and better understanding of the environmental impacts that may result from their activities and how to minimise the impact that they have to strictly follow the rules such as seperation of waste, control of waste and pollution from the production process and emergency response management to prevent environmental impact. • The Company reported the result of projects implemented in 2015 that the work-related accidents rate was the same as last year but the rate of work-related injury that results in days away from work in 2015 was 0.83 cases per one million hours worked, decreased by 24% compare to that of 2014 which was 1.10 cases per one million hours worked. • The Company promoted resourcesaving program to help businesses use resources more  efficiently in accordance with the environmental programs which includes reducing fuel consumption, reducing electricity consumption, reducing waste such as the seperation of waste for the proper treatment and disposal. • The Company continually conducted an annual community’s attitudes survey as the plant operation may cause both positive and negative impacts on the community such as economic, social and environmental impacts. This is to understand the views of the community and various impacts arising from the plant operation that leads to joint decision making between the plant and community through a participatory process such as the meeting with local council and community leaders, etc. The results of these processes will be


Good Corporate Governance

taken into consideration to determine the appropriate management strategies to create sustainable satisfaction for community. Safety and environmental policy demonstrates the Company’s commitment to reducing the environmental impact, preserving natural resources and energy by using them more efficiently. Furthermore reducing losses, sorting of the waste generated by the activities of the Company as well as reducing, controlling and treating waste in order to minimise environmental impacts, reducing and preventing the effects of climate change and taking care of biodiversity in the area. The success of safety, environmental and energy conservation program is affirmed by various certifications and awards as follows:่ • ISO 14001 certification: standard for environmental management system (since 1999). • TIS/OHSAS 18001 certification: standard for occupational health and safety management systems (TIS 18001 (2002 - 2015) and OHSAS 18001 (2007 - 2015) and since September 2015, the Company has implemented only OHSAS 18001 certification in order to save related cost, however, standard for occupational health and safety has not been changed or reduced strickness in anyhow). • Excellent workplace in Occupational Health, Safety and Working Environment from Ministry of Labour for the fourth consecutive year (since 2012). • Prime Minister’s Industry Awards for Safety Management for 2015 • The Group Purchasing Office supported the purchase of environmentally friendly products by sourcing products that have been authorised to use the Green label by the Thailand Environment Institute and also provided support to energy saving policy. The Company continually procured Energy Saving LED Bulbs for using at SSI Bangsaphan Plant. 3.2 Compensation Measures In the event that the stakeholders are damaged by violation of rights under the law, the Company has offered insurance to protect the rights of the stakeholders as follows: • Directors & Officers Liability Insurance • Marine Cargo Open Policy • Public Liability Insurance

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• All Risks of Property Damage, Machinery Breakdown, Boiler Explosion and Business Interruption Insurance (for major plants) • Property All Risks Insurance (for office buildings) In addition to the primary insurance coverage mentioned above, the Company has extend its insurance coverage to other SSI subsidiaries that have been operating both locally and abroad; such as West Coast Engineering Company Limited; Prachuap Port Company Limited; Thai Cold Rolled Steel Sheet Public Company Limited; and Sahaviriya Steel Industries UK Limited. Furthermore, a constant monitoring of unusual situations has been put in place to periodically assess the risks that may cause damage to the Company and its stakeholders. Provisions of additional insurance coverage would be implemented to the offset any increased risk. 3.3 Dispute with Stakeholders The Company has conducted its business in a way that avoids conflicts or disputes with the stakeholders; inclusive of its business involvements with customers, suppliers, competitors, employees, social, and the community. The Company has provided a mechanism to oversee and supervise all divisions of the Company to operate in compliance with the law by preparing a list of legal and regulatory restrictions that are to be complied with. In addition, each division has also reviewed its legal compliance and reported both complying and non-complying actions to the Group Legal Office to present to the Audit Committee on a quarterly basis. For major litigations and disputes against the Company as disclosed in the notes on the financial statements, the Company’s Group Legal Office will operate, coordinate and report any progress, predict outcomes of the cases and give recommendations to the Group Chief Executive Officer and the President periodically as well as report to the Audit Committee and the Board of Directors on a quarterly basis. 3.4 Whistleblowing Process The Good Corporate Governance Committee realised the importance of stakeholders’ participation in supervising the Company so they have arranged a tip-off and complaint reporting channel that allows the Company


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to receive information from employees and any group of stakeholders e.g. shareholders, customers, suppliers, competitors, social and the community. The reports can be of any concern for instance, law violation, unethical practice, fraud, corruption, breach of working positions, violation of conflicts of interest policy of the Company, violation or ignorance of duty according to policy, guidelines, instructions or regulations of the Company, inaccurate report of financial statements, improper internal control and any action harmful to reporters or the Company. The report can be directly forwarded to the Good Corporate Governance Committee as specified on the Company website. Such channels allow the Company to obtain more in-depth information on problems, the Company can thus analyse the information to find solutions and establish preventive measures, which will lead to more efficient management. The Company announced the Board of Directors’ policy regarding whistleblowing and guidelines regarding whistleblowing channels which became effective on 11 August 2008. Later, the Board of Directors approved the amendment of the Board of Directors’ guidelines regarding whistleblowing channels (revision no. 2) became effective on 28 February 2014 replacing the previous version. The amendment was made to add clarification of the protection measures for the informants or whistleblowers and to conform with the anti-corruption policy and guidelines. The Company communicated the said policy to employees and internal and external stakeholders for the information of channels and methods of reporting tip-offs or complaints, which include the Company’s intranet at http://ssi.net and the Company’s website at http://www.ssi-steel.com. Any whistleblower can report tip-offs or complaints via two channels: • By e-mail to ssigcg@yahoo.com, or • By post to The Good Corporate Governance Committee at the postal address of P.O. Box 534, Delivery Post Office Bangrak, Bangkok 10500. The Good Corporate Governance Committee is responsible for determining the procedures when being informed of the tip-offs or complaints and measures to protect the whistleblower with the right to access information on a tip-off or complaint reporting channels. Electronic and post mail boxes are kept confidential by external service providers and none of the Company’s employees can

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

access these mail boxes, except the people authorised by and report directly the Chairman of the Good Corporate Governance Committee. Moreover, the Company has already passed the certification process and became a certified company of the Private Sector Collective Action Coalition Against Corruption (CAC) on 22 January 2016. In 2015, the Company carried out several anti-corruption initiatives as detailed in the Corporate Social Responsibility Report 2015 under the section of Anti-Corruption.

4. Information Disclosure and Transparency The Board of Directors recognises the importance of disclosing material information of The Company, both financial and non-financial information, and that such information must be accurate, complete, timely, transparent and in accordance with the regulations stipulated by the Office of the Securities and Exchange Commission and The Stock Exchange of Thailand. The information is presented both in Thai and English for the investors, shareholders, securities analysts and other related parties including the public in order for them to have the information equally in accordance with the principles of good corporate governance. This material information may have a significant impact on the trading price of securities of the Company on The Stock Exchange of Thailand. The Board of Directors has explicitly declared its intention to execute its work in the Good Corporate Governance Policy of the Company. The Company assigned responsibility for disclosing the Company’s information to The Stock Exchange of Thailand and the Office of the Securities and Exchange Commission to the Corporate Secretary Office and the Investor Relations Department, Group Corporate Finance Office. 4.1 Information Disclosure Pursuant to the Notifications, Rules or Regulations of The Stock Exchange of Thailand and/or the Office of the Securities and Exchange Commission In 2015, the information disclosure of the Company by the Corporate Secretary Office comprised the following: • Disclosed all information necessary for the investors and shareholders to make decisions according to the regulations of The Stock Exchange of Thailand and


Good Corporate Governance

the Office of the Securities and Exchange Commission. This included the financial reports relating to the financial status and operating performance of the Company on a quarterly and annual basis after each review or audit by the licensed auditor, as well as the Management Discussion and Analysis (MD&A) of the Company, its subsidiaries and its joint venture to The Stock Exchange of Thailand and the Office of the Securities and Exchange Commission. • Distributed the 2014 Annual Report (Form 56-2) to the Company’s shareholders, along with the notice of the Annual General Meeting of Shareholders, and informed such information to The Stock Exchange of Thailand and the Office of the Securities and Exchange Commission within the period required by law. • Submitted Form 56-1 for the year ending 31 December 2014 to The Stock Exchange of Thailand and the Office of the Securities and Exchange Commission within 3 months from the end of accounting period of the Company as required by law. The disclosure of information to The Stock Exchange of Thailand and the Office of the Securities and Exchange Commission was properly completed and submitted in a timely manner. 4.2 Information Disclosure Pursuant to the Guidelines of The Stock Exchange of Thailand on the Transparency of the Companies The Board of Directors appointed a department to be responsible for the “Investor Relations” as a center for investor communication and to have the duty to disclose information of the Company to shareholders, institutional investors, public investors, securities analysts and relevant government sectors. To enhance the information provided to the aforementioned parties for in depth investment analysis of the Company’s securities, the Company has combined such a unit with the Corporate Finance Department to become the Corporate Finance and Investor Relations Department in 2011. At present, it becomes the Investor Relations Department under the Group Corporate Finance Office. The Public and Community Relations Office takes direct responsibility for the information disclosure to the public through mass media. Both offices have disclosed and distributed material information through the Company’s website at http://www.ssi-steel.com with regular updates on

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the information given for the stakeholders and related parties to always have key information of the Company such as financial information, annual reports, organisation news, social activities and securities analysis articles, both in Thai and English. 4.2.1 Investor Relations In 2015, the Group Investor Relations Department performed the following key activities through various channels: • Published the Company’s financial and nonfinancial information, good corporate governance policy, business ethics, director ethics and employee ethics (both in Thai and English) on the Company’s website at http://www.ssi-steel.com for shareholders and investors to have a convenient channel to equally access the Company’s information at all times. • Arranged for better communication between investors and shareholders and the Company. They can raise questions to the executives or request for more information through the e-mail address: ir@ssi-steel.com. They can also register to receive e-mail updates through the Company’s website. The contact person is Ms. Saithip Monthakantiwong, telephone number 0-2630-0280. • Communicated with securities analysts, investors and people interested in securities of the Company using the social networking tool via a Twitter account namely “SSI_Steel”. • Provided management discussion and analysis (MD&A) of the Company, its subsidiaries and its joint venture for the quarterly operating performance to be disclosed with quarterly financial statements. This is for investors to acknowledge and understand of any major changes including factors and events that affect its  financial position and results of operations apart from the information in the financial statements. • Organised analyst meetings with securities analysts twice a quarter (seven times in total). Before disclosure of financial statement, the meeting was held 14 days prior to the public disclosure and after disclosure, the meeting of a quarter was held on the same day or the first day after the submission of the financial statements to The Stock Exchange of Thailand and the Office of the Securities and Exchange Commission.


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However, the meeting before the discloser of Q3/2015 financial statement has not been held because there was the issue on financial statement of SSI UK, subsidiary in UK, which entered the liquidation process on 2 October 2015. • Joined SET’s Opportunity Day program to announce the Company’s operational results and financial position on a quarterly basis (one time). • Arranged meeting with Strategic Partner on a quarterly basis (four times). • Arranged group meetings or one-onone meetings for Thai and foreign institutional investors, securities analysts and retail investors and senior executives of the Company, at the Bangkok office as well as conference call meetings with foreign investment funds (three times). 4.2.2 Other Stakeholder and Public Relations In 2015, the Public and Community Relations Office pursued the following key activities: • Prepared news releases for mass media concerning the Company’s quarterly financial position and operational results on the first business day after the submission of the audited or reviewed financial statements to The Stock Exchange of Thailand and the Office of the Securities and Exchange Commission. • Issued press releases and photo releases regarding the Company’s activities to news reporters, so that information of the Company reaches investors and the general public on a regular basis. • Set up interviews with the Company’s executives when requested by mass media, to raise an understanding and accurate knowledge of the Company. • Arranged for publication of information and articles about the Company through various media, including: • Print media such as newspapers and annual reports • Exhibitions to provide useful information to target groups and the public. • Special media or electronic media such as the Company’s website http://www.ssi-steel.com, http://www.blogssi.com/360degree/, http://www.blogssi. com/ssiarsa/ and videos. • Provided communication channel for inquiries or information request raised to the Company via e-mail address: pr@ssi-steel.com.

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

5. Responsibilities of the Board of Directors 5.1 Board Structure 5.1.1 Board Composition The Board of Directors consists of qualified individuals with knowledge, competence, experience and special expertise from diverse area i.e. production, management, finance and accounting and long experience in the steel industry that is beneficial to the Company. Members of the Board of Directors registered with the Ministry of Commerce dated 21 September 2015, consisted of 11 members, including 6 Independent directors, 5 non-executive directors and 2 executive directors, Mr. Win Viriyaprapaikit who acts as the Group Chief Executive Officer and President, and Mr. Nava Chantanasurakon who acts as Group Executive Officer of Group Public Affairs and Vice President of Commercial Division. The number of independent directors is sufficient as defined by the Good Corporate Governance Policy and the Principles of for Listed Companies 2012. The names of the Board of Directors are as follows: 1. Mr. Wit Viriyaprapaikit Chairman of the Board of Directors 2. Mr. Somchai Sakulsurarat Deputy Chairman of the Board of Directors Independent Director 3. Mr. Tongchat Hongladaromp Director and Independent Director 4. Mr. Siripol Yodmuangcharoen Director and Independent Director 5. Mr. Permpoon Krairiksh Director and Independent Director 6. Mr. Pichai Eursirisub Director and Independent Director 7. Mr. Yarnsak Manomaiphiboon Director and Independent Director 8. Mr. Somchai Pipitvijitkorn Director 9. Mr. Kamol Juntima Director 10. Mr. Win Viriyaprapaikit Director 11. Mr. Nava Chantanasurakon Director


Good Corporate Governance

Directors who are authorised to sign on behalf of the Company are Mr. Wit Viriyaprapaikit, Mr. Kamol Juntima, Mr. Somchai Pipitvijitkorn, Mr. Win Viriyaprapaikit or Mr. Nava Chantanasurakon. Any two of these five directors can sign a document and affix the Company’s seal. 5.1.2 Term of Appointment of Director and Independent Director The directors shall hold the term of appointment as stipulated in the Public Limited Companies Act B.E. 2535 and the Company’s Articles of Association, which prescribe that at every Annual General Meeting, one-third (1/3) of the directors shall retire by rotation. The Company has not set the limit on the number of consecutive terms in office of director and independent director for the purpose of the flexibility of selecting a candidate who has appropriate experience and competence for the responsibility, and has a good insight into the Company and its operations. 5.1.3 Segregation of Duties of the Chairman of the Board of Directors and the President The duties and responsibilities of key people within the Company are segregated. Mr. Wit Viriyaprapaikit is the Chairman of the Board of Directors and Mr. Win Viriyaprapaikit is the Group CEO and President of the Company with the segregation of duties and responsibilities of each position explicitly determined. 5.1.4 Independence of the Chairman of the Board of Directors The Company does not have a policy requiring the Chairman of the Board of Directors to be an independent director due to the limitation in seeking a suitable person within the period specified. The iron and steel industry needs an experienced and proficient person in this specific area of expertise to take such position, apart from the qualifications of board vision and managerial expertise to maximise the benefits of the Company, the shareholders and other stakeholders. 5.1.5 Company Secretary The Company Secretary advises on legal issues and regulations necessary for the Board of Directors to know and perform the duty as well as coordinates to ensure the required execution of work according to the resolutions of the Board of Directors. The Board of Directors appointed Mr. Surasak Ngamsidhiphongsa as

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the Company Secretary and defined his qualifications and scope of duties and responsibilities as follows: Qualifications 1. Having a basic knowledge of laws and regulations regarding Public Limited Company, Security and Exchange law, or having attended training courses concerning corporate secretarial practices; 2. Having knowledge and understanding about corporate governance principles and best practices; 3. Being independent in the discharge of duties. Duties and Responsibilities 1. Providing basic advice pertaining to the laws and regulations, corporate governance best practices and the Company’s articles of association as well as reporting any significant changes to the Board; 2. Preparing agendas and documents for the Shareholders and Board of Directors Meetings; 3. Arranging the Shareholders and Board of Directors Meetings in accordance with the legal regulations and best practices; 4. Preparing the minutes of the Shareholders and Board of Directors Meetings, and monitoring subsequent actions in accordance with resolutions of those meetings; 5. Preparing and keeping registrations of directors, annual reports and notifications calling Shareholders and Board of Directors Meetings, as well as the minutes of the Shareholders and Board of Directors Meetings; 6. Ensuring that the directors and executives have filed reports on their interests and related persons’ interests, as required by law, as well as keeping reports on interest filed by directors and executives, and presenting copies of such reports to the Chairman of the Board, Chair person of the Audit Committee and the Chairman of the Good Corporate Governance Committee, as specified by law; 7. Ensuring that the corporate information disclosures distributed to regulatory agencies are in accordance with the law and regulations; 8. Assisting in Board activities; 9. Arranging performance assessments of the Board of Directors and reporting the results to the Board;


084

Good Corporate Governance

10. Communicating with shareholders on their legitimate rights and on the Company’s information; 11. Performing any other tasks in relation to compliance with the law and other regulatory requirements. 5.2 Role, Duties and Responsibilities of the Board of Directors The Board of Directors has the duty to approve or grant its consent on material businesses related to vision, mission, business direction and policy, business plan, strategy and the annual budget of the Company. The Board of Directors also govern the risk management and business operations to conform with the provided policies and business plan effectively and to comply with the law, rules and regulations of the supervisory authorities, objectives and regulations of the Company and the resolutions made at the Board of Directors’ meetings and shareholders’ meetings, concerning the best interests of the Company and stakeholders. This aims to bring about stable and sustainable growth to the Company which will lead to value creation to the shareholders in the long term. Details of the Authority and Duties of the Board of Directors are as follows: Authority and Duties of the Board of Directors 1. The Board of Directors are authorised and obligated to ensure that the Company operates with fiduciary duty, care and integrity; and complies with the objectives and articles of association of the Company, as well as the resolutions of the shareholders’ meetings. 2. By resolution or written authorisation, the Board of Directors is entitled to delegate its responsibilities to any person or individual, who may or may not be director, who will act on the Company’s behalf and sign their names so as to legally bind the Company according to conditions given to any person so delegated by the Board of Directors. The Board of Directors may delegate various aspects of its authority to one or more people. 3. The Board of Directors must meet, no less, than once every three months. 4. The Board of Directors must organise an Annual General Meeting of Shareholders within four months from the final day of the Company’s fiscal year. Any other meeting of shareholders should be designated an “Extraordinary Meeting”, and may be called at any

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

time by the Board of Directors at their discretion. This can also be called whenever a number of shareholders whose shareholdings represent no less than one fifth of the total number of issued shares, or at least twenty-five shareholders whose shareholdings represent no less than one tenth of the total number of issued shares, produce and all sign a document that clearly states their reasons and purpose in calling for a meeting. The Board of Directors must then summon an “Extraordinary Meeting” of Shareholders within one month from the date on which they receive such a letter from the shareholders. 5. The Board of Directors must produce a balance sheet and income statement, pertaining to the Company on the final day of its fiscal year and present it at the Annual General Meeting of Shareholders for their approval. The Board of Directors must arrange for the auditor to examine these financial statements before they are presented at the shareholders’ meeting. 6. The Board of Directors must appoint the Company Secretary to perform their duty on behalf of the Company or the Board of Directors as determined by law. In case of retirement or the inability to perform the duty required of the Company Secretary, the Board of Directors must appoint the new Company Secretary within 90 days from the date on which the position becomes vacant. The Board of Directors is authorised to assign any board member to act as the Company Secretary during the vacant period. The Chairman of the Board of Directors shall notify the Securities and Exchange Commission as to the name of the new Company Secretary within 14 days from the date on which the appointment is made, and also notify the Securities and Exchange Commission of the place where the documents are kept as determined by law. 5.2.1 Good Corporate Governance Policy The Board of Directors aims for an enhancement in the standard of good corporate governance. In 2002, the Board of Directors officially approved a good corporate governance policy of Sahaviriya Steel Industries Public Company Limited corresponding to the fifteen principles of good corporate governance stipulated by The Stock Exchange of Thailand. In December 2007, the meeting of the Board of Directors resolved to revise the good corporate governance policy of Sahaviriya Steel Industries Public Company Limited to conform to the


Good Corporate Governance

principles of good corporate governance for listed companies for the year 2006 as stipulated by The Stock Exchange of Thailand. Lately, in September 2014, the Company promulgated the new Good Corporate Governance Policy to be in accordance with the principles of good corporate governance for listed companies for the year 2012 published by the Thai Institute of Directors in cooperation with The Stock Exchange of Thailand and the Office of the Securities and Exchange Commission in January 2013. 5.2.2 Code of Ethics for Directors To conform with the Company’s business philosophy, in 2001, the Board of Directors passed a resolution setting out a code of ethics for the Company’s directors. 1) The Company’s directors must perform their duties in the spirit of the Company’s business philosophy and adhere to the code of ethics established by the Company. 2) The Company’s directors must perform their duties in compliance with the law, objectives and regulations of the Company, and resolutions of the shareholders’ meetings, and with all due honesty, integrity, and care for the interests of the Company. 3) The Company’s directors must dedicate sufficient time and all their knowledge, competence, and managerial skills in performing their duties and responsibilities to drive prosperity and stability of the Company and proper value creation. 4) The Company’s directors must perform their duties considering their responsibility to the shareholders and with all due concern for the interests of stakeholders, and must treat all groups properly and fairly. 5) The Company’s directors must not use their position to seek unfair benefits, must not disclose the Company’s confidential information to outsiders, must not seek benefits for themselves or related parties using the Company’s inside information and must not perform any action that will result in a conflict of interest to the Company. 5.2.3 Conflicts of Interest The Company has established numerous measures to prevent conflicts of interest and to execute connected or related transactions with transparency, clarity and proper justification. This aims to enhance the

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Company’s creditability and more effective business operations. These measures are as follows: 1) Policies on trade discounts as a means to enhance competitiveness, sales volume and market share, and rewards to loyal customers with continuous purchasing orders for hot-rolled coil. 2) Rules and procedures governing the extension of commercial credit in order to systematically authorise credit and control the credit risk. Establishment of the Credit Committee to analyse and decide the amount and type of commercial credit suitable for each client, considering the client’s needs and payment ability along with guarantees and conditions to prevent or reduce the risk of granting credit. The Committee also considers extending credit terms for each client. 3) Reports of the Company’s sales volume and prices presented at the meetings of the Management Committee on a monthly basis and the meetings of the Audit Committee on a quarterly basis to ensure the transactions between the Company and its connected persons are of an ordinary course of business and general trading conditions. 4) Reports of holdings and change of holdings in the Company’s securities of the directors and executives of the Company as disclosed in the 2015 annual report in the section of Supervision of Use of Inside Information. 5) Guidelines for the Board of Directors regarding the rules and procedures of reporting conflicts of interest of the directors and executives of the Company were established in 2009. The directors and executives of the Company, both at the Company and its subsidiaries, have reported conflicts of interest of themselves and related persons to the Company on a quarterly basis. 6) Guidelines pertaining to conflicts of interest were established in 2010 to ensure clarity on the actions deemed to cause conflicts of their own interest and the Company’s interest in order to avoid or prevent such actions. 7) The Audit Committee considered the draft of preliminary legal opinion prepared by Weerawong, Chinnavat & Peangpanor Ltd. regarding 1) The connected transactions of slab procurement between Sahaviriya Steel Industries UK Limited and Vanomet Holding AG and between Sahaviriya Steel Industries Public Company Limited and Vanomet Holding AG. 2) The purchase price


086

Good Corporate Governance

of slabs between Sahaviriya Steel Industries UK Limited and Sahaviriya Steel Industries Public Company Limited. Moreover, the Audit Committee proposed comments from all participants regarding this legal opinion to the Board of Directors meeting No. 10/2013 held on 14 August 2013. Nevertheless, at the Board of Directors’ meetings with the agenda concerning conflict of interest transactions, the directors who have conflict of interest must not participate in the consideration and must abstain in such agenda. 5.2.4 Internal Control and Internal Audit System Details can be found in the section of Internal Control and Risk Management. 5.2.5 Risk Management Details can be found in the section of Risk Factors. 5.3 Meetings of the Board of Directors 5.3.1 Determination of Meeting Schedules of the Board of Directors and Sub-Committees The Company has determined the meeting schedules of the Board of Directors and sub-committees for the year in advance by coordinating with related parties to set the schedule and inform each director, committee and relevant internal departments beforehand. Therefore, the directors and executives are able to arrange their schedules and attend the meetings all together. The Board of Directors’ meetings are held monthly. Apart from the agenda specified by the President, each director can also propose the matters to be included as the meeting’s agenda through various sub-committees and the Chairman of the Board of Directors will consider the matters to be included to ensure all important businesses are taken into account by the meeting. In the meetings of the Board of Directors and sub-committees, relevant senior executives of the Company also attend the meetings to provide supporting information on behalf of the person in charge. It is also a good opportunity for the Board of Directors to know the senior executives which can be helpful when considering the succession plan. In each meeting, the Board of Directors has acknowledged the reports on operating performance and progress on the tasks assigned as well as considered the matters under the scope of duties and responsibilities

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

of the Board of Directors. The Board of Directors has governed and supervised the corporate management and sub-committees to perform according to the plans and policies under the scope of duties and responsibilities assigned by the Board of Directors. The Company Secretary is the person pursuing the meeting to be in accordance with the Good Corporate Governance Policy of the Company. The meeting must have clarity on the agenda. The distribution of notices and supporting documents to the directors must comply with the Company’s aticles of association which require a prior notification of not less than 7 days before the meeting date. Therefore, the directors have sufficient time to study the information. Each meeting takes approximately 2 hours. In 2015, there were 18 meetings of the Board of Directors being held. The meetings normally were held once every month except in February and October held 2 meetings per month and in July and Septerber held 3 meetings per month. The meetings of sub-committees independently take a consideration on implementation of various activities under the scope of duties and responsibilities assigned by the Board of Directors with the secretary of each committee organising the meetings and notices and supporting documents distributed prior to the meeting dates. In 2015, the meetings of sub-committees can be summarised as follows: 1) Audit Committee held 8 meetings in February (2 times), March, May, August, September, November and December. 2) Nomination and Remuneration Committee held 3 meetings in February, April and June. 3) Good Corporate Governance Committee held 4 meetings in February, June, September and December. 4) Risk Management Committee held 4 meetings in January, April, July and October. The Company also held specific meetings of independent directors consisting of 6 members. In 2015, there were 4 meetings held in February, May, August and November to discuss on the management problems of the Company. If there is a material issue, the independent directors will propose to the Board of Directors’ meeting for further consideration.


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Good Corporate Governance

087

Furthermore, all the directors can also take part in corporate management with informal meetings held to consider particular matters concerning different areas of knowledge, proficiency, and suggestion needed from the directors i.e. engineering, production, or specific management area. Certain matters have also been discussed over the telephone with the directors having direct experience on a regular basis. 5.3.2 Summary of Attendance of Each Director in the Board of Directors’ Meetings and Sub-Committees’ Meetings Meeting Attendance of Directors in 2015 (Number of Meetings Attended / Number of Meetings Held) Name

Board of Directors

Nomination Good Audit Risk Independent and Corporate Committee Remuneration Governance Management Directors

1. Mr. Wit Viriyaprapaikit 18/18 Chairman 2. Mr. Somchai Sakulsurarat Deputy Chairman and Independent Director

17/18

8/8

3. Mr. Tongchat Hongladaromp Independent Director

11/18

4. Mr. Siripol Yodmuangcharoen Independent Director

7/18

5. Mr. Somchai Pipitvijitkorn 16/18 Director

3/3 2/3

6. Mr. Kamol Juntima 17/18 Director 7. Mr. Permpoon Krairiksh Independent Director

12/18

4/4

4/4

2/4 2/4

4/4

4/4

6/8

4/4

4/4

8. Mr. Piya Viriyaprapaikit 2/7 1/3 Director 9. Mr. Yarnsak Manomaiphiboon Independent Director

14/18

7/8

4/4

3/4

10. Mr. Pichai Eursirisub Independent Director

17/18

4/4

4/4

11. Mr. Win Viriyaprapaikit 18/18 Director 12. Mr. Nava Chantanasurakon 11/11 Director Remark: For some directors who were not able to attend the meetings of the Board of Directors or sub-committees as indicated above due to necessary reason or inevitably important business, the directors not attending the meeting also submitted a leave notice prior to the meeting. In case the directors have any issue or suggestion to propose in any agenda, they can inform the Company Secretary or the secretary of the meeting of each sub-committee. * No. 8 Mr. Piya Viriyaprapaikit has resigned from the Director of the Company since 16 June 2015. * No. 12 Mr. Nava Chantanasurakon was elected as director in the Board of Directors’ Meeting No. 7/2558 held on 18 June 2015.


088

Good Corporate Governance

5.4 The Board of Directors’ Performance Assessment  5.4.1 Board Self-Assessment The Company conducted a yearly selfassessment of the Board of Directors with the first implementation at the beginning of 2006 on their performance for the year 2005. The Board of Directors assessed its own performance using the Board of Directors Self-Assessment Guide of The Stock Exchange of Thailand, and has since employed the same approach every year. Input from this self-evaluation would be reviewed and used as guidelines for solving prospective problems and obstacles in the future. Each director is able to discuss the overall performance of the Board of Directors for further improvement and more effective development. The Board of Directors does not employ this approach on an individual basis. 5.4.2 Sub-Committees’ Self-assessment For the self-assessment of the committees, In 2015, every sub-committee conducted self-assessment using the self assessment of committee as a whole form issued by The Stock Exchange of Thailand. There were 3 sub-committees: the Audit Committee, the Risk Management Committee and the Nomination and Remuneration Committee, conducted self-assessment on an individual basis. The Audit Committee has an annual assessment which has been conducted since 2000. In earlier periods, it was done using the Audit Committee Self-Assessment Guide based on guidelines provided by the Thai Institute of Directors (IOD) and the American Institute of Certified Public Accountants (AICPA). Later in 2011, the “Form of Self-assessment of Audit Committee Performance” has been applied based on guidelines given in the “Audit Committee Manual” of the Office of the Securities and Exchange Commission in cooperation with The Stock Exchange of Thailand, the Thai Institute of Directors and Pricewaterhouse Coopers Company Limited published to listed companies on 28 December 2010. Its results will be annually reported to the Board of Directors. In 2015, the Audit Committee conducted self-assessment using both form issued by the Office of the Securities and Exchange Commission and The Stock Exchange of Thailand. The Board of Director acknowledged the self-assessment report for 2015 of all sub-committees.

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

5.5 Director and Executive Remuneration At the Annual General Meeting of Shareholders No. 16 held on 5 April 2005, it was resolved that the guidelines and remuneration rates be adjusted to a more appropriate level. The Board of Directors and the Board of Executive Directors would receive monthly compensation, while compensation of other committee members would be paid for each meeting. The President, as a senior executive position, would be compensated only for his/her executive role, but not as a director. Remuneration of directors and executives would be based on their scope of responsibilities and the Company’s overall performance. Remuneration of senior executives would also be based on their annual goals program. The director and senior executive remuneration package should be attractive enough to maintain qualified people with the Company while considering a comparison on remuneration package provided by the Company and that of other comparable entities in terms of good corporate governance in the industry. At the Extraordinary General Meeting of Shareholders No. 2/2011 held on 22 September 2011, the shareholders resolved to approve an adjustment on director remuneration to be in line with the change of the board structure. In summary, the remuneration of directors and senior executives of the Company has been consistent with the criteria proposed by the Nomination and Remuneration Committee as approved by the Board of Directors and at the shareholders’ meeting. Details of remuneration of directors and senior executives in 2014 can be found in the section of the Remuneration of Directors and Management. 5.6 Director and Management Development The Company has set a policy to encourage and support the directors and executives to attend training courses or participate in Company activities, for example, a company study visit in order to increase their knowledge and potential. Such knowledge are brought to enhance the Company’s operations. Training and seminars are provided both inside and outside the Company. In addition, a rotation program for senior executives in the SSI Group has also been conducted to share and gain experience within the Group.


Good Corporate Governance

To support the implementation mentioned above, the Company has also established the policy on human resource development, and guideline regarding employee training and seminars and a guideline regarding reimbursement of training and seminar expenses. 5.6.1 Development Program for Directors 1) Orientation for new directors There was one new elected director in 2015. The Corporate Secretary Office collects and delivers documents and information necessary for new directors to perform their duties. These comprise of the director manual, corporate authorisation manual, code of ethics of directors and other material information of the Company, i.e. business philosophy, business ethics, vision, value, morality of employees and conflicts of interest as published in the corporate manual under the title of SSI WAY. 2) Training and seminars for directors Details can be found in the section of the Board of Directors. 5.6.2 Development Program for Executives and Succession Plan 1) Orientation for new executives For new executives, an introduction to the Company’s business and operations has been provided by the executives from each division with related documents and information given as a working manual i.e. corporate authorisation manual and SSI WAY manual. 2) Training and seminar for executives Details can be found in the section of the Management. The Company has introduced Human Resource Policy (Extra) No. 2/2005 regarding the Succession Plan to accommodate the planning for future human resources of the Company by defining successors for key positions. The Succession Plan Sub-committee has planned and formulated a successor development program by preparing an Individual Development Plan assigned to the identified successors in an attempt to develop their potential in accordance with the Company’s requirements. The Company has identified the successors for key positions except the position of the President, and has completed such a development plan as well as made adjustments occasionally when appropriate.

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Sub-Committees

089

The Board of Directors has decentralised its authority and duties by appointing several sub-committees to assist in implementation of relevant matters by studying and screening material businesses under the scope assigned by the Board of Directors. There were 6 sub-committees appointed. However, in 2011, the Board of Directors’ Meeting resolved to rearrange the management structure of the Company, so the sub-committees has remained 4 committees as follows: 1) Audit Committee 2) Nomination and Remuneration Committee 3) Good Corporate Governance Committee 4) Risk Management Committee All sub-committees have an independent director as a chairman except for the Good Corporate Governance Committee. All members of the Audit Committee are independent directors. Most of the members of the Good Corporate Governance Committee and the Risk Management Committee are independent directors. Most of the members of the Nomination and Remuneration Committee are not independent directors. As a result, the Board of Directors will further consider increasing the number of independent directors. The sub-committees have the term of office of 3 years as specified by the Company where the limit on the number of consecutive terms in the same position is not stipulated. In addition, in 2011 the Board of Directors also resolved to establish the Management Committee to take on responsibilities previously belong to the Board of Executive Directors. The Management Committee consists of the senior executives of the Company as the members. Mr. Win Viriyaprapaikit, Group CEO and President, has been appointed as the Chairman of the Management Committee. The scope of authority, duties, and responsibilities of the sub-committees are as follows:


090

Good Corporate Governance

1. Audit Committee As of 31 December 2015 the Audit Committee consisted of three members, whose term of office is 3 years, (from 30 June 2014 to 29 June 2017) as follows: 1. Mr. Somchai Sakulsurarat Chairman of the Audit Committee 2. Mr. Permpoon Krairiksh Audit Committee Member 3. Mr. Yarnsak Manomaiphiboon Audit Committee Member All of the Audit Committee Members have adequate knowledge and adequate experience to perform its duties in reviewing the reliability of financial statements. Scope of Duties and Responsibilities of the Audit Committee 1. To review and ensure the accuracy and adequacy of the Company’s financial reports. 2. To review and ensure the suitability and effectiveness of the Company’s internal control system and internal audit system. To determine the independence of the internal audit office, and to approve the appointment, transfer and dismissal of the Head of Internal Audit. 3. To ensure the Company’s compliance with the Securities and Exchange Commission laws and laws relating to the Company’s business, as well as rules, regulations, notifications and orders issued by such laws. 4. To review the Company’s risk management system, particularly focusing on the Company’s major risks. 5. To consider, select and nominate the Company’s auditor and recommend his/her remuneration. 6. To review related transactions and transactions with potential conflict of interest comply with the securities and exchange laws and laws relating to the Company’s business as well as rules, regulations, notifications and orders issued by such laws. 7. To consider commissioning and ad-hoc consultants, at the Company’s expense, when professional advice or specific expertise is required. 8. To perform any other act as delegated by the Board of Directors. 9. In performing its duty; if the Audit Committee finds or suspects any reports or actions which have a material impact on the financial position and results of operations

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

of the Company, the Audit Committee shall report to the Board of Directors in time (for rectification) deemed as appropriate by the Audit Committee: 9.1 Report on conflicts of interest. 9.2 Fraud, Irregularity or Material defects in the internal control system. 9.3 Infringement of the Securities and Exchange Commission laws, and laws relating to the Company’s business as well as rules, regulations, notifications and orders issued by such laws. 10. To report the operational results of the Audit Committee to the Board of Directors at least twice a year. 11. To prepare the report of the Audit Committee for disclosure in the annual report. The report must be signed by the Audit Committee Chairperson disclosing the necessary information under the basis and regulations of The Stock Exchange of Thailand.

2. The Nomination and Remuneration Committee As of 31 December 2015, the Nomination and Remuneration Committee consisted of 3 members whose term of office is 3 years (from 1 September 2014 to 31 August 2017) as follows: 1. Mr. Siripol Yodmuangcharoen Chairman of the Nomination and Remuneration Committee 2. Mr. Somchai Pipitvijitkorn Nomination and Remuneration Committee Member 3. Mr. Nava Chantanasurakon Nomination and Remuneration Committee Member Scope of the Duties and Responsibilities of the Nomination and Remuneration Committee 1. Duties and Responsibilities - Nomination 1.1 Select and review candidates nominated to hold the position of a director, the president or higher. For a vacancy in the executive officer position or the Board of Directors position, in the event the position is open for reasons other than the expiration of a term of office, a list of nominees will be submitted to the Board of Directors for resolution. While in other cases, a list of qualified candidates available to fulfill a director vacancy and selected by the Board of Directors, will be proposed to


Good Corporate Governance

their shareholders at the Annual General Meeting of Shareholders for resolution. 1.2 To select personnel suitable for nominating as the Company’s directors or the President, and submit their names at the Board of Directors’ meeting and/or a shareholders’ meeting for further consideration as stated in 1.1, the Nomination and Remuneration Committee shall proceed as follows: 1.2.1 Consider the qualifications and personal characteristics of the candidates proposed for selection as Board members or President, with regards to: Leadership, special expertise and certain knowledge and experience required, morals, integrity, accountability, principles and professional commitment to work, maturity and stability and the ability to express an independent opinion. 1.2.2 Consider the independence and qualification of candidates proposed for selection as independent directors. 1.2.3 Consider the candidates available time in evaluating whether it is enough to devote to the position as the Company’s director. Other considerations such as, the number of meetings attended will be reviewed in the re-election of any director for an additional term and also the number of companies that candidates serve simultaneously will be taken into account in the Nomination of new directors. 1.2.4 Comprehensively verify that candidates meet the qualifications required by legal and regulatory requirements. 1.3 Review and propose alterations to the Board of Directors regarding the appropriateness of the size and composition of the Board to effectively perform their duties. Aspects such as the size of the Board; the Board shall have enough qualified directors to be delegated to a subcommittee. The composition of the Board; The Board shall consist of qualified individuals with knowledge, competence, experience and special expertise from diverse areas in order to ensure prudent decision making. In addition, the appropriate size of independent directors shall be taken into consideration in accordance with good corporate governance best practices. 1.4 Perform other duties regarding nomination as assigned by the Board of Directors.

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2. Duties and Responsibilities – Remuneration 2.1 Consider remuneration for the Board of Directors, a director as a member of sub-committees and the President and propose the remuneration at the Board of Directors’ meeting or a shareholders’ meeting as the case may be for resolution. This remuneration shall include (a) monthly retainers (b) meeting attendance fees (c) incentives i.e. annual bonuses or pensions and (d) other benefits. 2.2 To be transparent, fair and reasonable when determining the appropriate remuneration, the Nomination and Remuneration Committee shall proceed within the following criteria and guidelines: 2.2.1 The remuneration shall be reasonable and of a level that is able to attract and retain directors and executives who possess the required qualification. The Committee may consider comparing its remuneration with other companies of a similar size; measured by sales revenue, total assets, profitability, complexity, etc. 2.2.2 The remuneration shall be appropriate and relate to the scope of the duties and responsibility of each director. The more responsibilities assigned to the directors the more compensation they shall receive. For example, any additional compensation should be paid to


092

Good Corporate Governance

a member of a sub-committee for service on a sub-committee in addition to compensation for services as a director. Moreover, the chairman of the Board of Directors and a sub-committee should be compensated more than their members, at an appropriate rate. 2.2.3 The remuneration of the directors that link to the Company’s performance such as an annual bonus, shall also link to the return to shareholders by way of dividends. If a dividend is not paid to the shareholders in the year, a bonus will not be paid to the directors. 2.2.4 An executive director position will only be paid for service as an executive officer and not for service as a board member. 2.3 Review and recommend to the Board of Directors regarding the appropriate remuneration for the Board of Directors, on an annual basis. In doing so, follow the criteria and guidelines for determining the remuneration as stated above, prior to the proposal in a shareholders’ meeting for further consideration. 2.4 Evaluate the performance of the president level and higher on an annual basis, in order to determine their remuneration, before a proposal to the Board of Directors for approval. The annual total returns, performance of other significant duties as well as the long term value creation of the Company and shareholders will be taken into consideration for the performance evaluation. Moreover, there shall be comparisons made of the Company’s performance against other companies in the same industry to support the decision. 2.5 Perform other duties regarding remuneration as assigned by the Board of Directors. 3. The committee may seek the advice of outside advisors or experts, as deemed necessary and appropriate, at the Company’s expense, in order to obtain the beneficial advice so as to aid the efficiency, performance of duties and responsibilities of the Committee. For reporting, the committee shall report regularly of performance results to the Board of Directors according to its charter: • Report meeting results to the Board of Directors for acknowledgement after every meeting of the Nomination and Remuneration Committee as well as other significant reports regarding nomination and remuneration as deemed appropriate.

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

• Report performance results of the Nomination and Remuneration Committee to the shareholders on an annual basis via the Company’s annual report.

3. Good Corporate Governance Committee As of 31 December 2015, the Good Corporate Governance Committee consisted of 3 members, whose term of office is 3 years (from 4 December 2013 to 3 December 2016), as follows: 1. Mr. Kamol Juntima Chairman of the Good Corporate Governance Committee 2. Mr. Yarnsak Manomaiphiboon Good Corporate Governance Committee Member 3. Mr. Pichai Eursirisub Good Corporate Governance Committee Member Scope of Duties and Responsibilities of the Good Corporate Governance Committee 01. Assess and propose to the Board of Directors the Company’s policies concerning good corporate governance in accordance to business philosophy, and the code of business conduct of the Company as well as international good corporate governance principles. 02. Develop and evaluate procedures or guidelines concerning good corporate governance and propose them to the Board of Directors. 03. Oversee the performance of the Company’s management to ensure that they conform to the Company’s policies and guidelines concerning good corporate governance as approved by the Board of Directors. 04. Provide advice on corporate social responsibility (CSR) to the Company management. 05. Oversee the Company’s management to ensure that they establish a clear execution plan for CSR policies, and follow up their implementation according to the plan, submitting the results to the Board of Directors. 06. Review business philosophies, codes of business conduct, codes of ethics for directors and codes of ethics for employee, as well as guidelines concerning the aforementioned as deemed appropriate, proposing the finding to the Board of Directors. 07. Appoint external good corporate governance advisers if deemed necessary and appropriate, at the Company’s expense.


Good Corporate Governance

08. The Good Corporate Governance Committee may take courses to enhance its knowledge in matters related to its work, at the Company’s expense. 09. Perform any other tasks relating to good corporate governance that are assigned by the Board of Directors. 10. Report the results of the Good Corporate Governance Committee’s tasks to the Board of Directors for acknowledgement on an appropriate basis or at least twice a year. They must report immediately to the Board of Directors for acknowledgement or consideration of a matter that has a significant impact on the Company, and provide suggestion or recommendation for such matter as it deems appropriate. 11. Prepare a report of the Company’s Good Corporate Governance for disclosure to the shareholders on an annual basis via the Company’s annual report (56-2 form): 11.1 A report of the Good Corporate Governance Committee signed by the Chairman of the Committee; 11.2 A report on Compliance with the Principles of Good Corporate Governance as defined by The Stock Exchanges of Thailand and the Securities and Exchange Commission.

4. Risk Management Committee As of 31 December 2015, the Risk Management Committee consisted of 3 members whose term of office is three years (from 4 December 2013 to 3 December 2016), as follows: 1. Mr. Tongchat Hongladaromp Chairman of the Risk Management Committee 2. Mr. Somchai Pipitvijitkorn Risk Management Committee Member 3. Mr. Permpoon Krairiksh Risk Management Committee Member Scope of Duties and Responsibilities of the Risk Management Committee 1. Review and propose the Company’s risk management policy and acceptable risk appetite to the Board of Directors for approval. 2. Oversee the development and implementation of the Company’s enterprise risk management framework. 3. Review risk management reports submitted by management in order to monitor the Company’s major risk

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exposures and take appropriate action to ensure that such risks have been effectively monitored and controlled by management on an ongoing basis. 4. Make additional recommendations to the Board of Directors with respect to risk management, including problems and difficulties encountered in the course of the development of the Company’s risk management system. 5. In carrying out its duties and responsibilities, the Risk Management Committee may engage outside professional consultants for advice, as deemed necessary and appropriate, and may take courses to enhance its knowledge in the matter related to its works, at the expense of the Company. 6. Perform any other duties as may be assigned by the Board concerning risk management.

5. Management Committee As of 31 December 2015, the Management Committee consisted of 8 members, as follows: 1. Mr. Win Viriyaprapaikit Chairman of the Management Committee 2. Mr. Nava Chantanasurakon Management Committee Member 3. Mr. Kittisak Mapanao Management Committee Member 4. Mr. Narongrit Chotnuchittrakul Management Committee Member 5. Mr. Somsak Sivapaiboon Management Committee Member 6. Mr. Thavorn Cananub Management Committee Member 7. Mr. Manin Inprom Management Committee Member 8. Mr. Suchart Plysiri Management Committee Member Scope of Duties and Responsibilities of the Management Committee 1. Study, analyse and propose the Company’s policies, strategies, long-term plans, annual plans, budgets, investment plan, capital budgets, expansion plans and plans for new operations or joint ventures; to the Board of Directors for approval.


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Good Corporate Governance

2. Responsible for implementing the policies and plans approved by the Board of Directors, as well as monitoring and evaluating the results of those operations to submit to the Board of Directors for its consideration. 3. Comply with the scope of authority determined under the Authorisation Chart approved by the Board of Directors. 4. Perform any other duties as assigned by the Board of Directors.

Nomination and Appointment of Directors and Management 1. Independent Directors • The Nomination and Remuneration Committee has set the criteria for selecting an independent director as stated in the Nomination and Remuneration Committee’s charter item No. 5.1.2. • The number and qualification of an independent director are defined as follows:  (1) The Company shall have independent directors at least one-third of its board size but not less than three Independent Directors. (2) An independent director shall have the following qualifications: (A) Holds no more than 0.5% of total voting shares of the Company, its parent company, its subsidiaries, its associated companies, its major shareholder or controlling person of the Company, including shares held by related persons of the independent director. (B) Is not or has not ever been an executive director, employee, staff, advisor who receives full time salary or a controlling person of the Company, its parent company, its subsidiaries, its associated companies, the subsidiaries in same level, its major shareholder or controlling person of the Company unless the foregoing status has ended not less than 2 years prior to the date of appointment. The aforementioned prohibited qualifications do not include the case where the independent director was a government official of, or an advisor to, a government unit who is a major shareholder or controlling person of the Company. (C) Is not a person related by blood or legal registration such as; father, mother, spouse, sibling and

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

child including spouse of the children, management, major shareholders, controlling persons or persons to be nominated to management or controlling person of the Company or its subsidiaries. (D) Is not or has not had a business relationship with the Company, its parent company, its subsidiaries, its associated companies, its major shareholder or controlling person of the Company, in the manner that may interfere with his independent judgment; or, is not or has not ever been a significant shareholder or controlling person of any person having business relationship with the Company, its parent company, its subsidiaries, its associated companies, its major shareholder or controlling person of the Company unless the foregoing relationship has ended not less than 2 years prior to the date of appointment. The term “business relationship” aforementioned under the first paragraph shall include any normal business transaction, rental or lease of immovable property, transaction relating to assets or services, or granting or receipt of financial assistance through receiving or extending loans, guarantee, providing assets as collateral, including any other similar actions, which result in the Company or its counterparty being subject to indebtedness payable to the other party in the amount of 3% or more of the net tangible assets of the Company or Baht 20 million or more, whichever is the lesser. The amount of such indebtedness shall be calculated according to the calculation method for value of connected transactions under the Notification of the Capital Market Supervisory Board governing rules on connected transactions mutatis mutandis. The consideration of such indebtedness shall include indebtedness occurred during the period of 1 year prior to the date on which the business relationship with the person commences. (E) Is not or has not ever been an auditor of the Company, its parent company, its subsidiaries, its associated companies, its major shareholder or controlling person of the Company and is not a significant shareholder or partner of an audit firm which employs auditors of the Company, its parent company, its subsidiaries, its associated companies, its major shareholder or controlling person of the Company unless the foregoing relationship has ended not less than 2 years prior to the date of appointment.


Good Corporate Governance

(F) Neither be nor have been any professional advisor including a legal advisor or financial advisor who receives an annual service fee exceeding Baht 2 million from the Company, its parent company, its subsidiaries, its associated companies, its major shareholder or controlling person of the Company, and neither be nor have been a significant shareholder, controlling person or partner of the professional advisor unless the foregoing relationship ended not less than 2 years prior to the date of appointment. (G) Is not a director who has been appointed as a representative of the Company’s director, major shareholder or shareholders who are related to the Company’s major shareholder. (H) Does not operate any business which has the same nature as, and is in competition with, the business of the Company and its subsidiaries or is not to become a significant partner in a partnership or is not an executive director, employee, member of staff or advisor who receives a full time salary or holds more than 1% of total voting shares of any other companies operating business which has the same nature as and is in competition with the business of the Company or its subsidiaries. (I) Does not have any other characteristics that will cause the inability to express independent opinions with regard to the Company’s business operations. After being appointed as independent directors with qualifications in accordance with clauses (A) to (I), the independent directors may be assigned by the Board of Directors to make decision on the business of the Company, its parent company, subsidiaries, associated companies, its subsidiaries in the same level, its major shareholders or controlling person of the Company, in the form of collective decision. Remarks: • Related person means a person in section 258 of Securities and Exchange Commission Act. • Significant shareholder means a shareholder in any entity having more than 10% of the total voting shares, including shares held by a related person. • Partner means a person authorised by the audit firm or professional provider to sign an auditors’ report or a professional report (as the case may be) on behalf of juristic person. • An executive director means a director holding a management position, a director with the responsibility

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in any implementation as management and an authorised director who can sign in binding company, except if it is expressly shown to be signing at the approval of the committee and in joint signing with other directors. • A subsidiary in the same level means any two or more subsidiaries under the same parent company. Directors who are authorised to sign on behalf of the Company are Mr. Wit Viriyaprapaikit, Mr. Kamol Juntima, Mr. Somchai Pipitvijitkorn, Mr. Win Viriyaprapaikit or Mr. Nava Chantanasurakon. Any two of these five directors can sign a document and affix the Company’s seal.

2. Directors and Management • The Nomination and Remuneration Committee defined the criteria for selection of directors and management as explicitly stated in The Nomination and Remuneration Committee Charter that “5.1.2 Selection of director candidates for nominating as the Company’s director or the President, and proposal of their names at the Board of Directors’ meeting and/or a shareholders’ meeting for further consideration. The Nomination and Remuneration Committee shall proceed as follows: 5.1.2.1 Determine the qualifications and personal characteristics of the candidates proposed for selection as Board members or the President, with regards to: a good leader, special expertise and certain knowledge and experience required, moral, integrity and accountability, principle and professional commitment to work, maturity and stability, and the ability to express an independent opinion. 5.1.2.2 Consider the independence and qualification of candidates proposed for selection as independent directors. 5.1.2.3 Consider time available of candidates whether it is enough to devote to the position as the Company’s director such as the number of meetings attended will come into the consideration for the re-election of any director for an additional term and the number of company that candidates simultaneously serves on will be taken into consideration for the Nomination of new directors. 5.1.2.4 Carefully verify the nominated person for qualifications according to the legislation and regulations requirements.”


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Good Corporate Governance

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

The shareholders have the right to appoint directors to a board. The Company notified The Stock Exchange of Thailand regarding the right of minority shareholders to propose matters considered important and constructive as an agenda of the shareholder’s meeting as well as the right to propose qualified candidates for the director nomination. The proposal must be submitted in advance via e-mail or a regular mail to the Company Secretary within a specified period, and in compliance with the guidelines published on the Company’s website.

• The terms of the joint venture agreement between the Company and its joint venture, Thai Cold Rolled Steel Sheet Public Company Limited was stipulated that the nomination of the directors, and/or president and/or executives to take such a position in the joint venture are determined by each group of shareholders must pursuant to its joint venture agreement.

Governance of Subsidiaries and Joint Venture

1. Relevant laws and the Company’s policy regarding the use of inside information to prevent wrongful action on the Company’s securities trading and to ensure a fair and an equal treatment to all shareholders are listed below: • The Securities and Exchange Act, B.E. 2535 (1992) • The Securities and Exchange Commission (SEC) notification number Sor.Jor. 12/2552 (2009), regarding the preparation and disclosure of report on securities holding of directors, executives and auditors dated 10 June 2009. • The Company’s Good Corporate Governance Policy 2014 stated that the Board of Directors shall ensure that guidelines concerning the use and protection of insider information for trading of the Company’s securities are implemented and thoroughly communicated to all relevant parties. • The practice guidelines of the Board of Directors regarding the use and protection of inside information for trading of the Company’s securities (No. 4) became effective on 2 March 2015: - Directors and employees must not use inside information from reports that have been or will be made regarding the Company’s business activities, for the benefit of themselves or others. Moreover, they must not advise others on the purchase and sale of securities of the Company based on such information. - Directors and employees who possess inside information must protect the information that has not yet been disclosed to the public with due care and must limit access to such information to only those who need to know, as well as must not disclose such information to the public except as authorised or required by the laws.

1. The mechanisms for the Company to supervise and control management of its subsidiaries and its joint venture, so to ensure the protection of interest of the Company’s investment, are as follows: • The Company’s executives are nominated for the position of directors and/or Chief Executive Officer, President and/or Executives of significant divisions of its subsidiaries and its joint venture in order to supervise their performance. Such nomination must be approved by the Board of Directors in accordance with the joint venture agreement. • The Scope of duties and responsibilities of nominated executives are as stated in the job descriptions as defined by the Company’s subsidiaries and joint venture. The nominated executives must submit a monthly performance report of such subsidiaries and joint venture as well as ensure that its goals and business direction determination comply with those of the Company. • With respect to the guidelines regarding conflicts of interest of the Company, it was stipulated that every employee, including the President, not be able to take a position of director or executive in any business which competes directly or indirectly with the Company; and not be a director of other companies that are engaged in or going to be engaged in businesses with the Company, except the position of affiliates as granted by the Board of Directors. 2. Disclosure of the contractual agreement between the Company and other shareholders regarding the management of its joint venture.

Supervision of Use of Inside Information


Good Corporate Governance

- Directors and executives must not buy or sell or transfer the Company’s securities, which they, their spouses and minor children hold, for a period of one month starting from the end of each fiscal quarter and ending after one full day of trading following a public disclosure of the Company’s quarterly or annual results. - The Company requires the directors and executives of the Company including employees in the position of Assistant Vice President and higher, Department manager or equivalent and higher in the Finance and Account Division, Section manager or equivalent and higher in the Investor Relations Department to report their holdings and change of holdings of the Company’s securities within 30 days from the date of appointment as a director or an executive of the Company and within 3 business days from the date of purchasing or selling the Company’s securities. 2. Supervision on compliance with relevant laws and the Company’s policies • To ensure material information of the Company is kept confidential prior to disclosing to The Stock Exchange of Thailand and is disclosed immediately after the Board of Directors passes a resolution on such matter to The Stock Exchange of Thailand before any other channel in order for the shareholders and investors to access the disclosed information on a timely and equal basis. • To report the holdings of the Company’s securities of the Company’s executives to the meeting of Good Corporate Governance Committee on a quarterly basis. • To report to every meeting of the Board of Directors regarding the holdings of securities of the Company’s directors and executives pursuant to the notifications of the Securities and Exchange Commission and to disclose such information to the Office of the Securities and Exchange Commission. 3. Punishment measure for employees not complying with the practice guidelines of the Board of Directors regarding the use and protection of inside information for trading of the Company’s securities • The Company has imposed a punishment measure for employees performing an action considered

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to be harmful to the Company’s reputation as well as taking advantage from working at the Company for their own or other benefits or disclosing the confidential information related to business conduction, operating system, production and any other confidential information. The measure is in accordance with the practice guideline of Disciplinary Punishment Measure and Disciplinary Action which refers to Human Resource Manament Policy No. 4/2008 dated 27 May 2008 regarding Disciplinary Action and Disciplinary Punishment.

Auditor’s Remuneration in 2015 1. Audit Fee The Company, its subsidiaries and joint venture in Thailand including Prachuap Port Company Limited, West Coast Engineering Company Limited and Thai Cold Rolled Steel Sheet Public Company Limited accrued an audit fee for the past fiscal year of Baht 4,205,000 to KPMG Phoomchai Audit Limited, of which the auditor, a person or business related to the auditor and an office of the auditor. The Company’s overseas subsidiary which is Sahaviriya Steel Industries UK Limited accrued an audit fee for the past fiscal year of GBP 91,500 to KPMG LLP, of which the auditor, a person or business related to the auditor and an office of the auditor.

2. Non-audit Fee

The Company and its subsidiaries in Thailand (Prachuap Port Company Limited) also accrued Baht 55,000 for other services which have not been completed during the past fiscal year, the auditing of a project that received investment privilege and for which an exemption from annual income tax may be requested, to KPMG Phoomchai Audit Limited and a person or business related to the auditor and an office of the auditor. The Company’s overseas subsidiary (Sahaviriya Steel Industries UK Limited) also accrued GBP 19,000 for other services such as tax related services fee to KPMG LLP.


098

Social and Community Contribution

Social and Community Contribution

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Overview The Company has set a policy for itself and its subsidiaries to conduct their businesses with responsibility to society, environment, and stakeholders in accordance with CSR guidelines, launched by the Stock Exchange of Thailand. The Company’s CSR report can be found on CSR booklets and on the Company’s website at http://www. ssi-steel.com.


Social and Community Contribution

The Company has operated CSR by adhering its vision “Innovate premium value steel products and services for customers; generate consistent profit and sustainable value for stakeholders” and integrating with its policies in various aspects. These include good corporate governance policy, business ethics and business practices to conduct suitable business for its manner and communicating to all groups of stakeholders. The Company establishes the guidelines for CSR operation and communication under the concept “innovate • strength”.

Report Production This CSR report has been developed in accordance with Global Reporting Initiative (GRI) G4 which is an international initiative.

Business Operation and Its Effects on CSR The Company has conducted its business in a way that avoids conflicts or disputes with the stakeholders; inclusive of its business involvements with customers, suppliers, competitors, employees, society, and the community. The Company has provided a mechanism to oversee and supervise all divisions of the Company to operate in legal compliance by preparing a list of legal and regulatory restrictions to be complied by the Company. The list is updated on a regular basis. In addition, each division also reviewed its legal compliance and reported to the Group Legal Office to collect and present all finding to the Audit Committee on a quarterly basis. For major litigations and disputes against the Company as disclosed in the notes to the financial statements, the Company’s Group Legal Office will coordinate and report the progress, predict the outcomes of those cases, and give recommendations to the Group CEO and President periodically, as well as report to the Audit Committee and the Board of Directors on a quarterly basis.

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CSR-After-Process

099

The Company has continuously focused on social and community development in accordance with sustainable development to strengthen the relationship with its stakeholders. This has been done by adhering to three principles: creativity, stakeholder engagement and operation efficiency. In 2015, the Company operated 42 social and community development projects. These projects are divided into two parts: 1) Social development to strengthen the underprivileged and 2) Community development in 4 aspects: Education quality development, Environment quality development, Job and income development, and Good quality of life development which includes religion and culture support. Examples of the 2015 projects are as follows: • The Company collaborated with steel industry partners, namely Thai Cold Rolled Steel Sheet Plc. (TCRSS), Siam United Steel (1995) Co., Ltd. (SUS), NS Blue Scope (Thailand) Limited (NS Blue Scope), and Nippon Steel & Sumikin Galvanizing (Thailand) Co., Ltd. (NSGT) and JFE Steel Galvanizing (Thailand) Company Limited (JSGT), to arrange Thailand Iron Man Mini Marathon 2015. The mini marathon managed to raise Baht 2 million for organisations to support vulnerable people with more than 1,400 participants.


100

Social and Community Contribution

• The Company has been supporting educational projects, including Sahaviriya Funds for Bangsaphan Educational Developments Project and SVG Annual Scholarships, which has continuously provided scholarships for primary schools – bachelor’s degree students in Bangsaphan district. In 2015, 21 schools received 242 scholarships, worth Baht 540,000. Moreover, SSI staff also provided additional fund, “Tun Nee Phue Nong”, with 92 scholarships, worth Baht 105,000, for the youths in Bangsaphan. • The Company has developed many youth development projects such as Sufficiency Economy School for Sustainability Project, Young Agriculturist Project, Youth Council Project, Local Curriculum Development Project and Creative Arts, Wide Imagination Project. One hundred fifteen selected drawing pieces was sent to compete in the international contest in Japan.

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

• The Company considered its responsibility to the environment and natural resources. The Company controlled the industrial processes to ensure that pollution would not affect the quality of life and health of staff and local residents. The Company, together with associated officers, arranged activities to improve the quality of the environment including, SSI Beach Clean-Up Project, Bangsaphan Car Free Day, SSI Waste Bank Project, Youth Conservation Camp, and Super Smart & Intelligent Kids 2015 (SSI KIDS) which involves supporting the youth to realise the importance of water in their communities and to collect water sampling to test water quality. • “SSI Arsa Project” a volunteering project SSI Staff and executives worked together to arrange activities to help the society and community in Bangsaphan district. This project has generated pride among the staff. In 2015, SSI Staff arranged 1 major volunteering activity and 14 minor activities under the project “SSI 25th Anniversary, 250 Virtues.” There were 360 SSI Staff members with 2,880 volunteering service hours, plus 163 residents with 1,304 volunteering service hours, participating in this project.

Anti-corruption The Company places a strong emphasis on conducting business under the principles of good corporate governance and social responsibility which is intended for sustainable development. The Company deems that corruption is harmful and causes great damage to organisations and the nation. The Company therefore fully supports the implementation of the anti-corruption policy. As a result, on 22 January 2016, the Company was certified by Thailand’s Private Sector Collective Action Coalition Against Corruption Project (CAC) and became a member of CAC. In 2015, the Company carried out several anti-corruption initiatives as follows:


Social and Community Contribution

The Company established supervision and control practices to prevent and monitor fraud and corruption risks, which were summarised as follows:

1. Policies and Guidelines on Anti-corruption The Board of Directors Meeting No. 13/2015 held on 17 September 2015 unanimously approved the policy and guidelines regarding anti-corruption continually from last year to confirm its intent and expectations to implement the anti-corruption policy. The Board also acknowledged anti-corruption measures and penalties as well as an example of related law on anti-bribery and  anti-corruption, the various offences and penalties for such offences. The anti-corruption policy states that Directors, Executives, and all employees are prohibited from accepting or being involved in any type of corruption either directly or indirectly. The Company shall act strictly in enforcing compliance with Thai anti-corruption laws and regulations, and those of each country in which the Company conducts its business. The Board also determined that the Company’s subsidiaries and its jointly controlled companies shall adopt this anti-corruption policy including any guidelines issued by virtue of such a policy. The anti-corruption guidelines provide guidance on offering or receiving gifts or entertainment or hospitality activities, granting contributions or donations to charities or common wealth, and political contributions. Guidance on reporting of suspected fraud or corruption is also provided. This policy and guidelines were developed in addition to the “SSI WAY” including the Company’s commitment to ethics as mentioned in business philosophy, integrity as mentioned in business ethics, employee ethics and values, as well as the ethical conduct for employees on conflicts of interest as mentioned in the Company’s guidelines regarding conflicts of interest.

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2. Communication of Policies and Guidelines on Anti-corruption The Company recognised the importance of communicating policy and guidelines on anti-corruption. They were communicated by an e-mail and internal newspaper. All employees are able to access to this policy and guidelines which were posted on the Company’s intranet and also available on the Company’s website. 3. Training The Company has continually provided training to encourage executives and employees to be aware of anti-corruption. A seminar on the topic “Anti-corruption and Sustainable Development” for management and employees was held in July 2015. And to ensure that employees truly understand and can comply with the anti-corruption policy and guidelines, the seminar on anti-corruption policy for employees was also held in September 2015. Moreover, a topic on the anti-corruption policy was included in the orientation program for new employees. In 2015, the orientation program was held four times. 4. Putting Policies into Practice The Board of Directors Meeting No. 9/2015 held on 16 July 2015 approved the Board notification No. 1/2015 regarding the appointment of the Anti-corruption working committee, which became effective from 20 July 2015, to put the anti-corruption policy into practice and to enable the Company to maintain what it has been doing as a certified company of Thailand’s Private Sector Collective Action Coalition Against Corruption. This is to express the Board’s commitment and intent on Anti-corruption and to ensure that the Company has an anti-corruption measures monitoring, a delegation of power and a clear responsibility to implement the anti-corruption policy.


102

Social and Community Contribution

5. Fraud and Corruption Risk Assessment The Company assessed risk of fraud and corruption by the risk owner of each division who identified events where fraud and corruption risk might occur in his/her area, assessed the likelihood and impact, reviewed and designed appropriate measures to combat fraud and corruption. The Group Risk Management Office then collected their results and proposed them to the Risk Management Working Committee for consideration before submitting to the Risk Management Committee for acknowledgement. This will be done annually.

The Company determined guidelines on monitoring and evaluating compliance with the anti-corruption policy as follows: 1. Whistle-Blowing System The Company provided Whistle-Blowing channels for stakeholders to raise concerns about offenses against the law, unethical practices, poor or unacceptable practices, abuse of authority, irregularities, corruption, fraud or misconduct, violations of the Company’s conflict of interest policy,  abuse and disregard of company policy, guidelines, instructions or procedures, fraudulent financial reporting, deficiencies in internal control systems or any action that may cause damage to the informants or the Company, without fear of retribution by having measures to protect the informants or whistleblowers. The Company also provided measures to review or investigate the whistleblower’s concerns and the imposition of punishment of offenders. All the whistleblower’s concerns that were raised with the Good Corporate Governance Committee were to be tracked and examined, resolved and responded to informers as soon as possible. These were also reported to the Audit Committee for acknowledgement. Moreover, a summary of the Good Corporate Governance Committee’s activities were also reported to the Board of Directors twice a year.

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

2. Internal Audit The Group Internal Audit Office participated in an assessment to assure and advise on good corporate governance, risk management and internal control. The Company’s internal control was assessed by the Group Internal Audit Office together with the management on a quarterly basis especially the assessment of risk factors relating to misstatements arising from fraudulent financial reporting or misappropriation of assets. The Group Internal Audit Office also developed an audit coverage plan and an annual audit plan using a risk based approach including fraud and corruption risk. The audit engagements were conducted following the annual audit plan approved by the Audit Committee and the audit results were reported to the Audit Committee.

Innovation, Research and Development

The Company recognises the need to focus on capability development in the steel industry. This is shown by the increase of research projects that the Company has been creating for certification. From 2006 to 2014, the R&D expense related to 90 certified research projects was approximately Baht 64.2 million. However, in 2015, the National Science and Technology Development Agency


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Social and Community Contribution

(NSTDA) has changed its certification procedure and the Company faced financial difficulty, therefore, the number of our certified research project was not increase from 2014. Nevertheless, the Company will continuously encourage our R&D department to develop research projects to increase knowledge base and increase the Company’s competitive edge in the steel industry. As for research network development, the Company has signed memorandum of understanding in metallurgy and materials research with other government agencies and renowned universities. In 2015, the Company collaborated with Synchrotron Light Research Institute (Public) Organization on “Surface Problems in Hot-Rolled Low Carbon Steel Analysis” and also collaborated with King Mongkut’s University of Technology Thonburi in conducting researches on “Micromechanical based Design for Advanced High Strength Steels in Automotive Parts” to develop hot-rolled steel products for automotive industry.

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Safety, Occupational Health and Work Environment Management The Company recognises its social responsibility to take care of its employees and contractors working in the SSI Bangsaphan Steelworks area by focusing on safety and occupational health in accordance with the occupational health principle. The management of safety and occupational health is based on Thai Industrial Standard (TIS) 18001 which have been evaluated for certificates continuously. The Company has operated its occupational health and safety management, by arranging a number of projects, instilling the concept of safety, such as Behaviour Based Safety (BBS) Project and Zero Accident Campaign. The Occupational Health and Safety Committee has been closely monitoring safety and providing guidelines to improve safety in all of the plant areas. With support from the management, the Lost Time Injury Frequency Rate (LTIFR) in 2015 has reduced to 0.76 from 1.10 in 2014.

Lost Time Injury Frequency Rate (LTIFR) of SSI Group SSI Group of Companies

2013

2014

2015

SSI TCRSS WCE PPC SSI UK SSI Group

0.97 0.00 1.63 0.00 2.20 1.50

1.10 0.00 2.32 2.94 2.85 2.00

0.76 0.52 2.12 0.00 2.36 1.55

LTIFR = Number of Lost Time Injury x 1,000,000) / Total working hours

Moreover, the Company has provided training courses of safety and occupational health, safety management on transportation, fire protection training and emergency responses for employees. In 2015, there was no fire incident or severe accident, affecting production process, property and employees’ lives.


104

Internal Control and Risk Management

Internal Control and Risk Management

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Board of Directors’ Opinion on the Company’s Internal Control System The Board of Directors of Sahaviriya Steel Industries Public Company Limited recognises the importance of good and effective internal control, as explicitly stated in the Good Corporate Governance Policy of the Company as it is believed to help in preventing harm, minimising risk to its business activities and achieving the Company’s vision and mission. The Board of Directors has assigned the Audit Committee to ensure the appropriateness and effectiveness of the Company’s internal control and internal audit system as stated in the Audit Committee Charter (No. 3) dated 11 August 2008 which was recently revised on 24 December 2015. The Audit Committee has reported that the Company has suitable and efficient internal control and internal audit systems. This was demonstrated by results from an assessment of the adequacy of the internal control system for the year 2015 using the self-evaluation forms issued on 19 February 2014 by the Securities and Exchange Commission regarding internal control over financial reporting in accordance with the criteria in the new Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). From the results of the assessments for the year 2015, the Company completely complies with those criteria in the self-evaluation form; hence the Audit Committee concluded that the Company has appropriate internal controls in place to prepare reliable financial reports.


Internal Control and Risk Management

The Internal Audit Office has been established since 1998 as an independent internal unit of the Company, and carries out its responsibilities pursuant to the Company’s notification regarding the Internal Audit Charter dated 11 November 2009 which is superseded by the notification regarding the Internal Audit Charter (No. 2/2012) dated 15 March 2012. The scope of work of the Internal Audit Office is to perform internal audit functions covering all divisions, departments and offices of SSI and the companies in SSI Group. In December 2014, the Board of Directors approved the establishment of the Group Internal Audit under the new organisational structure of the Company as a group function which the Audit Committee has preliminary approved. The Group Internal Audit still report directly to the Audit Committee since their appointment in 1999. Over the past year, the Audit Committee has also approved the Internal Audit master plan and the annual audit plan which correspond to the risk-based approach as well as acknowledged the internal audit reports regarding internal control. Moreover, the Head of Internal Audit can immediately contact the Audit Committee for discussion when any major problems or important matters are found. The Board of Directors concurred with the report from the Audit Committee that “the Company has suitable and efficient internal control and internal audit systems.”

Head of Internal Audit Profile 1. Head of Internal Audit The Head of Internal Audit in 2015 was Mrs. Wannee Sirikanchana, who was appointed by the resolution of the Board of Executive Directors at meeting No. 23/1998 held on 8 December 1998. The Internal Audit Office was transformed to the Group Internal audit Office, effective from 1 January 2015 by the resolution of the Board of Directors at meeting No. 13/2014 held on 18 December 2014. As Mrs. Wannee Sirikanchana was retired from her work since 1 January 2016, The Board of Director meeting No. 1/2016 held on 5 January 2016 then approved the appointment of Miss Pattamawan Boontang as a chief, Group Internal Audit for her replacement.

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The Board of Director’s meeting No. 2/1999 held on 30 June 1999 approved the Audit Committee Charter regarding the audit committee appointment, terms of membership, meetings, scope of duties and responsibilities and reporting, effective from 30 June 1999. Later, the Board of Directors’ meeting No. 4/2008 held on 11 August 2008 approved the amendment of the Audit Committee Charter for the purpose of addressing the scope of duties and responsibilities of the Audit Committee. The responsibilities of the Audit Committee are not only to review and ensure the suitability and effectiveness of the Company’s internal control system and internal audit system, but also to determine the independence of Internal Audit, and to approve the appointment, transfer and dismissal of the Head of Internal Audit. 2. The Audit Committee’s opinion on the Head of Internal Audit The Audit Committee concluded that the former Chief of Group Internal Audit office who was in charge in 2015 and her replacement have sufficient knowledge and competence needed to perform duties. 3. Guidelines on the appointment, transfer and dismissal of the Head of Internal Audit The scope of duties and responsibilities of the Audit Committee covers the approval of the appointment, transfer and dismissal of the Head of Internal Audit.


106

Related Party Transactions

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Related Party Transactions

Related Party Transactions Name of Entities

Nature of Relationships

Related Transactions in 2015 (Million Baht)

Outstanding Balance (Million Baht)

Thai Coated Steel Sheet Direct subsidiary, Revenue from deep-sea Trade accounts Co., Ltd. 3.7% shareholding port and marine receivable and common director shipping services 1.00 Accrued income Revenue from maintenance services 0.55 Other income 3.05 Thai Cold Rolled Jointly controlling Revenue from sale of Trade accounts Steel Sheet Plc. shareholder, 35.19% hot rolled coils 70.24 receivable shareholding Revenue from deep-sea Accrued income port and marine Other payables shipping services 43.87 Revenue from maintenance services 39.02 Tolling services 79.93 Other income 10.10 Bangsaphan Barmill Plc. Common directors Revenue from deep-sea Trade accounts and direct and indirect port and marine receivable shareholding by the shipping services 12.00 Accrued income Company’s director(s) Revenue from Other receivables maintenance services 0.08 Other income 0.64

0.18 3.53

12.21 2.1 0 0.07

1.83 4.99 0.14


Related Party Transactions

Name of Entities

Nature of Relationships

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Related Transactions in 2015 (Million Baht)

107

Outstanding Balance (Million Baht)

B.S. Metal Co., Ltd. Common directors Revenue from sales of Trade accounts and direct and indirect hot rolled coils/scrap 3,148.65 receivable 2,292.48 shareholding by the Revenue from Other receivables 8.76 Company’s director(s) maintenance services 0.13 Accrued income 0.61 Cut sheet expenses 7.10 Trade accounts payable 0.26 Other payables 1.49 Sahaviriya Plate Mill Plc. Common directors Discount for sale of slabs (29.11) Trade accounts and direct and indirect Tolling services 78.01 receivable 83.88 shareholding by the Tolling expenses 2.40 Other receivables 255.91 Company’s director(s) Prapawit Building Common directors Office Rental 19.33 Other receivables 0.14 Property Co., Ltd. and direct and indirect Revenue from Trade accounts payable 0.03 shareholding by the maintenance services 0.08 Other payables 0.78 Company’s director(s) Western Housing Common directors Accommodation Other payables 0.01 Co., Ltd. and direct and indirect expenses 0.12 shareholding by the Company’s director(s) Sahaviriya Management Common directors None - None Service Co., Ltd. and direct and indirect shareholding by the Company’s director(s) Sahaviriya Panich Common directors Revenue from sale of Trade accounts Corporation Co., Ltd. and direct and indirect hot rolled coils 4,473.97 receivable 2,147.66 shareholding by the Company’s director(s) Line Transport Co., Ltd. Common directors Revenue from deep-sea Trade accounts with the subsidiary port and marine receivable 0.36 and direct and indirect shipping services 4.14 Other receivables 0.10 shareholding by the Revenue from Trade accounts payable 60.74 Company’s director(s) maintenance services 0.18 Other payables 11.56 Other income 1.54 Local transportation expenses 319.13 Bangpakong Lighter Common directors Revenue from deep-sea Trade accounts Co., Ltd. with the subsidiary port and marine receivable 0.07 and direct and indirect shipping services 0.60 Other receivables 0.06 shareholding by the Other income 0.25 Trade accounts payable 2.91 Company’s director(s) Water transportation Other payables 2.76 expenses 59.61 Financial costs 0.11


108

Related Party Transactions

Name of Entities

Nature of Relationships

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Related Transactions in 2015 (Million Baht)

Outstanding Balance (Million Baht)

Bangpakong Port Common directors Tolling services 156.81 None Co., Ltd. with the subsidiary Local transportation and direct and indirect expenses 888.18 shareholding by the Loss from sale of slabs 59.74 Company’s director(s) Prachuap Pattana Common directors None - None Development Co., Ltd. and direct and indirect shareholding by the Company’s director(s) Sahaviriya Iron and Steel Common directors None - None Co., Ltd. and direct and indirect shareholding by the Company’s director(s) Sahaviriya Inter Steel Common directors None - None Holdings Co., Ltd. and direct and indirect shareholding by the Company’s director(s) C.A.R. Services Co., Ltd. The direct and indirect None - None shareholding by the Company’s director(s) Prachuap Steel Co., Ltd. Common directors None - None and indirect shareholding by the Company’s director(s) Redcar Bulk Terminal Jointly controlling None - None Limited shareholder, 50.00% shareholding Vanomet AG Common shareholder Purchases of slabs 555.79 Advance Payment for and common director Finance costs 27.54 slabs in a subsidiary Trade accounts payable Sahaviriya Shipping Common shareholder None - None UK Limited and director and indirect shareholding by the Company’s director(s) Thai Steel Sales Co., Ltd. Common directors Revenue from sale of Other payables and direct and indirect hot rolled coils 235.17 shareholding by the Company’s director(s)

-

-

-

-

-

-

267.19 23.65 -

5.70


Related Party Transactions

Necessity and Reasonableness of Related Party Transactions Transactions between the Company and related parties have all been carried out under the ordinary course of business. The related business terms and conditions have been considered as aiming to the highest benefit of the Company. The Company has applied the same pricing policy and business terms to either related parties or third parties.

Approval Policy for Related Party Transactions The President is authorised by the Board of Directors to approve transactions between the Company and related parties under the ordinary course of business and general business terms. This is in compliance with the related Securities and Exchange Commission Act, regulations, announcements, notifications, or provisions of the Stock Exchange of Thailand, as well as the provisions of related party transactions disclosure and the acquisition or disposal of assets of the Company and its subsidiaries, stipulated by the Federation of Accounting Professions under the Royal Patronage of His Majesty the King.

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109

Any related party transactions occurred between the Company and its related parties shall be reported to the Board of Directors and reviewed by the Audit Committee to determine whether they are necessary and appropriate. Any director who has conflict of interest with the related party transaction has no right to vote. If the Audit Committee has insufficient expertise, an independent expert or the Company’s auditor shall advise on the transaction. This advice will then be provided as information to the Board of Directors or the shareholders, as the case may be. The Company shall disclose the related party transactions in a note to financial statements audited by the Company’s auditor.

Trend of Related Party Transactions Policy Related party transaction policies are subject to change as they are dependent upon supply and demand as well as the Company’s selling prices and the related cost of the service providers.


110

Key Financial Information

Key Financial Information

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Summary of Auditor’s Report

The auditor who audited the Company’s consolidated and separate financial statements and its subsidiaries’ financial statements for the 2015 was: • Ms. Sureerat Thongarunsang Certified Public Accountan Registration No. 4409 KPMG Phoomchai Audit Ltd. In 2013, the independent auditor’s opinion was unqualified with emphasis of matters. In 2014, the independent auditor’s opinion was unqualified with emphasis of matters. In 2015, the independent auditor’s opinion was disclaimer with emphasis of matters. The summary of the disclaimer basis and the attention drawn by the auditor for the 2015 Company’s consolidated and separate financial statements, including additional explanation are as follows:

Basis for Disclaimer of Opinion 1. Limitation of audit scope Liquidation of Sahaviriya Steel Industries UK Limited (“SSI UK”) SSI UK is wholly-owned by the Company. As disclosed in Notes 2 and 8, since the establishment of SSI UK and until 2 October 2015, when SSI UK entered the liquidation process, the consolidated financial statements of the Group include the financial statements of SSI UK. A petition for winding up SSI UK was lodged and the application was granted on 2 October 2015 and SSI UK’s financial statements for Group consolidation purposes as at that date were prepared on a break-up basis. Consequent to the appointment of a liquidator for SSI UK, the Company no longer controls the business or operations of SSI UK and, therefore, the financial statements of SSI UK have not been included in the consolidated financial statements of the Group from 2 October 2015. The results of the coke manufacturing and steel making business of SSI UK for the period to 2 October 2015 have been recorded separately in the consolidated statement of income of the Group for the year ended 31 December 2015 as discontinued operations. As disclosed in Note 2, the commencement of liquidation of SSI UK has resulted in its assets being frozen; access to its manufacturing facilities, in which most of its accounting records and related supporting documents are located, blocked; and key personnel in financial reporting being dismissed. Consequently, management has prepared the financial statements of SSI UK for the purpose of presentation and disclosure of discontinued operations in the consolidated statement of income of the Group for the year ended 31 December 2015 based on SSI UK’s management accounts and


Key Financial Information

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111

related reports made up to 31 August 2015 and estimates for the remaining period to 2 October 2015, using all relevant information available to the Group to date. Due to the limitation on the scope of my audit imposed by the above circumstances I was unable to carry out satisfactory audit procedures to conclude whether recognition and presentation in the consolidated statement of income and disclosure in Note 8 relating to discontinued operation is prepared, in all material respects, in accordance with Thai Financial Reporting Standards. Addition explanation As SSI UK applied to the court (The High Court of Justice Chancery Division Manchester District) for liquidation in which it was approved and the court has appointed an Official Receiver to proceed in liquidation process on 2 October 2015, when SSI UK entered the liquidation process. Thereafter, SSI UK’s financial statements for Group consolidation purposes as at the date were prepared on a break-up basis. The Company presented the statement of financial position and its results according to the financial reporting standard. As for the statement of financial position and its result of discontinued operation whose audit scope was limited as stated by the auditor, the Company would like to clarify that because of the liquidation process as stated above, consequently, assets evaluation could not be performed as well as all financial information could not be accessed adequately. Nevertheless, the management of the Company has made an effort and discretion cautiously to prepare financial information for the purpose of presentation and disclosure of discontinued operations in the consolidated financial statements of income of the Group for the year ended 31 December 2015 based on SSI UK’s management accounts and related reports made up to 31 August 2015 and estimates for the remaining period to 2 October 2015, using all relevant information available to the Group to date including estimates of SSI UK’s Assets Held for Sale or Disposal. The Company estimates the value of Assets Held for Sales or Disposal after deducting the expenses occurred during the liquidation and the contingent expenses concerning to safety and environmental related regulations, on a conservative basis, to be zero recovery after the completion of SSI UK liquidation. As SSI UK’s main asset is a large iron and steel making plant, controlled under the Control of Major Accident Hazards regulation, there are uncertain external factors which are beyond the Company’s control, for instance the validity of the environmental permit, access and ability to safeguard the assets, etc. The legal and liquidation proceeding in this case is unprecedented and unclear to the Company at this stage. Notwithstanding, the Company believes that the consolidated and separate financial statements were prepared and presented in accordance with the financial reporting standards. 2. Material uncertainty concerning going concern basis of accounting As disclosed in Note 2(e) and 8 to the financial statements, during the year ended 31 December 2015, the Group incurred a net loss of Baht 40,897 million (includes losses from the discontinuation of SSI UK’s operation of Baht 38,037 million) and as at 31 December 2015 the Group had a cumulative deficit of Baht 68,526 million and its current liabilities exceeded its current assets by Baht 54,496 million. As at the same date and for the same period, The Company incurred a net loss of Baht 67,124 million (including losses from the liquidation of SSI UK of Baht 64,329 million); had cumulative deficit of Baht 68,229 million; and current liabilities exceeded current assets by Baht 54,325 million. As disclosed in note 8 to the financial statements, pursuant to the discontinuation of SSI UK’s operations the major lenders demanded immediate payment of the remaining balance of a lone carried at USD 815 million (equivalent to Baht 30,034 million as at 31 December 2015) which was primarily secured by SSI UK’s property, plant and equipment and guaranteed by the Company. The major lenders also demanded the Company to be responsible for this obligation as guarantor. In addition, on 1 October 2015 the major lenders demanded immediate payment of the remaining balance of another of the Company’s loan carried at


112

Key Financial Information

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Baht 9,840 million as at 31 December 2015. In view of this situation, on 1 October 2015 The Board of Directors of the Company approved for the Company to submit an application for Business Rehabilitation to the Court. These circumstances indicate the existence of a material uncertainty which casts significant doubt about the Group’s and the Company’s ability to continue as going concerns. Management has the opinion that despite the above circumstances, the Group and the Company should be able to generate sufficient cash flows from future operations to cover operating costs and to meet financing commitments. This opinion is based on the discontinuation of SSI UK’s operation, which had been incurring losses, the commencement and implementation of the Business Rehabilitation Plan, and the support of the major lenders. The consolidated and separate financial statements have been prepared by management on the going concern basis on the assumption that the Business Rehabilitation will be the successful and such further capital and credit facilities will be secured to the extent that the Group’s and the Company’s operations require. The validity of this assumption is, however, dependent on 1) the success of the Business Rehabilitation Plan, which had not commenced at the date of this report, including the measures taken to improve profitability and cash flows; 2) the successful outcome of the Group’s negotiations with its major lenders in debt restructuring; and 3) the availability of financing from other sources to meet funding requirements. I consider that, whilst adequate disclosures have been made in this regard, these matters give rise to significant doubt about the Group’s and the Company’s ability to continue as going concerns, If the Group and the Company were unable to continue as going concerns, the realisable value of assets may be significantly less than their carrying value. No adjustments to the classification or carrying value of assets and liabilities have been made in the consolidated and separate financial statements should the Group and the Company not be able to continue as going concerns. Addition explanation Consolidated net loss for the year ended 31 December 2015 was mainly due to losses from the liquidation of a subsidiary resulted from global steel’s severe over-capacity and severe imbalance of the demand and supply since late 2014. In addition, steel prices had fallen steadily, causing a huge operation loss for the Group in 2015. Therefore, the Group and the Company decided to liquidate the Upstream Business to stop loss and damage that might occur in the future. Total current liabilities of the Group and the Company exceeded current assets since the Major Creditors demanded an immediate payment of obligations as a guarantor of the subsidiary. Although the success of Business Rehabilitation depends on external factors (such as the measures taken to improve profitability, the successful outcome of the Company’s negotiation with its Major Creditors in debt restructuring, the availability of financing to meet funding requirements, the court judgment, etc.), the Company believes that the business is fundamentally viable. In the event that the approval of Business Rehabilitation has been granted, it will result in maximum benefit to the creditors and other stakeholders. Subsequently, the Court issued an order for the Company’s Business Rehabilitation on 10 March 2016. 3. Material uncertainty other than going concern As disclosed in Note 2 to the financial statements, on 1 October 2015, the Board of Directors of the Company approved the Company to submit a petition for Business Rehabilitation to the Central Bankruptcy Court. The Court scheduled the inquiry on the petition to testify on the court proceeding on 21 December 2015 and the next inquiry date will be on 17 February 2016. As at the date of this report, The Court’s examination and consideration to order the Company for Business Rehabilitation had not been concluded. Such circumstance indicates the existence of a material uncertainty as to whether the court will accept the company for Business Rehabilitation and thereby enable commencement of the business rehabilitation plan as planned. It also casts doubt about the classification and measurement of liabilities and provisions.


Key Financial Information

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113

Addition explanation As at the date of preparation of financial statements for the year ended 31 December 2015, the Court’s inquiry is still in progress. The Company agrees with the auditor’s opinion that, as the Court’s examination and consideration to order the Company for Business Rehabilitation has not yet been concluded; therefore, there is material uncertainty concerning the Court’s acceptance of the Company’s Business Rehabilitation and commencement of the Business Rehabilitation as planned including uncertainty concerning the classification and measurement of liabilities and provisions, whether the Court will approve the Company for Business Rehabilitation or not. Nevertheless, 1) the current status of the Company which the Court issued an order for the Company’s Business Rehabilitation on 10 March 2016 2) the support from creditors for debt restructuring in accordance with the Company’s ability to generate revenues which will help the business to continue, and 3) the Company believes that Business Rehabilitation will be resulting in ability to service debts and be more beneficial to the stakeholders than placing a forced sale auction on the Company’s assets. The Company will accelerate to carry out its business following the Business Rehabilitation Plan correspondingly. Emphasis of matter I draw attention to Note 4 to the accompanying financial information. During the year ended 31 December 2015, the Group and the Company sold goods to related companies and joint venture in the normal course of business totaling Baht 18,565 million and Baht 7,899 million, respectively, which represented 51% of the Group’s total sales and which represented 41% of the Company’s total sales for those periods, respectively. As at 31 December 2015, the Group’s and the Company’s outstanding trade accounts receivable from those related parties amounted to Baht 4,564 million and Baht 4,547 million, respectively. Moreover, during the year ended 31 December 2015, the Group and the Company purchased goods from related companies in the normal course of business totaling Baht 15,175 million and Baht 7,682 million, respectively, which represented 34% of the Group’s total purchases and which represented 40% of the Company’s total purchases for those periods, respectively. Addition explanation The Company predominantly wholesales to both domestic and overseas customers. Domestic customers are both the Company’s related parties and non-related parties consisting of end-users and traders and coil centers. The Company has no policy to directly do business with retailers or hold shares in the business of its traders and coil centers because of the associated credit risk. One of the common strategies for the business is to separate manufacturer from distributor. As such, there are related companies which have been established as distributors of HRC and other steel products before the Company’s establishment as a manufacturer. The Company has become a major supplier for those related companies with rather high sales portion. In addition, the Company, as a hot rolled coil manufacturer, has applied the same pricing policies which depend on ordering quantity and frequency to both related and non-related parties. For related party transactions, the Company usually discloses the transfer pricing policies in the notes to the financial statements.


114

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Key Financial Information

Summary of Financial Statement Statement of Financial Position

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture As at 31 December

2015 (Baht)

%

2014 (Baht)

%

2013 (Baht)

%

Assets Current assets Cash and cash equivalents 156,508,506 0.5 351,400,815 0.5 163,098,186 0.2 Trade accounts receivable 4,590,821,162 16.0 5,311,902,438 6.9 5,108,189,827 6.0 Other accounts receivable from related parties 532,521,538 1.9 1,310,416,921 1.7 2,265,496,613 2.7 Inventories 3,483,343,439 12.2 13,628,691,848 17.6 17,387,555,837 20.5 Other current assets 197,564,544 0.7 2,406,515,640 3.1 3,230,008,421 3.8 Total current assets 8,960,759,189 31.3 23,008,927,662 29.8 28,154,348,884 33.2 Non-current assets Restricted deposit at financial institution 12,720,143 0.0 21,288,350 0.0 - Investments in joint venture 2,621,770,381 9.1 3,418,594,342 4.4 3,839,291,317 4.5 Property, plant and equipment 16,853,312,928 58.8 50,513,059,433 65.4 52,424,543,309 61.9 Intangible assets 158,975,157 0.6 245,303,285 0.3 249,476,666 0.3 Deferred tax assets 45,121,952 0.2 32,277,450 0.0 3,268,823 0.0 Other non-current assets 12,107,442 0.0 12,414,658 0.0 55,256,538 0.1 Total non-current assets 19,704,008,003 68.7 54,242,937,518 70.2 56,571,836,653 66.8 Total assets 28,664,767,192 100.0 77,251,865,180 100.0 84,726,185,537 100.0


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Key Financial Information

115

Statement of Financial Position

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture As at 31 December

2015 (Baht)

%

2014 (Baht)

%

2013 (Baht)

%

Liabilities and equity Current liabilities Bank overdrafts and short-term loans from financial institutions and from related parties 12,796,099,840 44.6 22,638,350,536 29.3 21,888,601,462 25.8 Trade accounts payable 2,804,253,376 9.8 10,802,757,605 14.0 12,614,249,781 14.9 Other accounts payable from related parties 21,836,192 0.1 889,582,036 1.2 1,568,448,371 1.8 Current portion of long-term loans from financial institutions 7,033,461,665 24.5 7,639,329,476 9.9 1,924,003,791 2.3 Long-term borrowings classified as current liabilities 6,629,284,761 23.1 22,034,033,707 28.5 - Subordinated convertible debentures - - 236,070 0.0 - Current portion of finance lease liabilities 68,763,059 0.2 54,692,504 0.1 49,845,471 0.1 Current portion of hire purchase liabilities 3,629,691 0.0 6,601,542 0.0 6,896,383 0.0 Provision made for loss on guarantee given and others 30,533,752,034 106.5 - - - Provision for onerous contracts - - 575,188,520 0.7 337,508,589 0.4 Short-term provisions - - - - 7,790,000 0.0 Income tax payable - - 1,355,209 0.0 3,676,521 0.0 Other current liabilities 3,566,049,863 12.4 5,034,991,788 6.5 5,642,869,004 6.7 Total current liabilities 63,457,130,481 221.4 69,677,118,993 90.2 44,043,889,373 52.0


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Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Key Financial Information

Statement of Financial Position

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture As at 31 December

2015 (Baht)

%

2014 (Baht)

%

2013 (Baht)

%

Non-current liabilities Long-term loans from financial institutions - - - - 27,879,310,667 32.9 Subordinated convertible debentures - - - - 149,008 0.0 Finance lease liabilities 72,005,250 0.3 98,226,864 0.1 161,062,683 0.2 Hire purchase liabilities 1,003,263 0.0 3,338,283 0.0 6,241,605 0.0 Employee benefit obligations 211,276,457 0.7 195,308,532 0.3 161,647,754 0.2 Environmental liabilities and others - - 600,563,651 0.8 597,841,684 0.7 Deferred tax liabilities 1,161,437,602 4.1 1,216,177,430 1.6 1,264,733,220 1.5 Other non-current liabilities 917,315 0.0 1,217,528 0.0 1,517,745 0.0 Total non-current liabilities 1,446,639,887 5.0 2,114,832,288 2.7 30,072,504,366 35.5 Total liabilities 64,903,770,368 226.4 71,791,951,281 92.9 74,116,393,739 87.5


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Key Financial Information

117

Statement of Financial Position

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture As at 31 December

2015 (Baht)

%

2014 (Baht)

%

2013 (Baht)

%

Liabilities and equity Equity Share capital Authorised share capital 50,263,663,124 39,867,778,559 39,867,778,559 Issued and paid-up share capital 32,166,262,124 112.2 32,166,258,124 41.6 32,166,258,124 38.0 Discount on ordinary shares issuance (5,678,076,131) (19.8) (5,678,076,131) (7.4) (5,678,076,131) (6.7) Equity distribution from shareholders from repurchase of subordinated convertible debentures 366,207,178 1.3 366,219,977 0.5 366,219,977 0.4 Convertible rights - - 24,779 0.0 24,779 0.0 Revaluation surplus - The Group 4,102,902,362 14.3 4,315,634,500 5.6 4,500,473,668 5.3 - Joint Venture 92,686,173 0.3 99,906,412 0.1 104,851,834 0.1 Currency translation differences - - 555,555,387 0.7 593,137,611 0.7 Retained earnings (deficit) Appropriated - Legal reserve 530,226,819 1.8 530,226,819 0.7 530,226,819 0.6 Unappropriated (deficit) (68,525,918,318) (239.1) (27,695,817,978) (35.9) (22,789,391,004) (26.9) Equity attributable to owners of the Company (36,945,709,793) (128.9) 4,659,931,889 6.0 9,793,725,677 11.5 Non-controlling interests 706,706,617 2.5 799,982,010 1.0 816,066,121 1.0 Capital deficiency/total equity (36,239,003,176) (126.4) 5,459,913,899 7.1 10,609,791,798 12.5 Total liabilities and equity 28,664,767,192 100.0 77,251,865,180 100.0 84,726,185,537 100.0


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Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Key Financial Information

Statement of Income

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture For the year ended 31 December

2015 (Baht)

%

2014 (Restated) (Baht)

2013 %

(Baht)

%

Income Revenue from sale of goods 19,255,060,580 93.9 32,316,180,884 96.9 64,735,191,615 98.2 Revenue from rendering of services 917,943,960 4.5 776,216,087 2.3 651,738,474 1.0 Gain on sales of investment in joint venture - - - - 362,779,468 0.6 Net foreign exchange gain 260,027,046 1.3 177,563,510 0.5 - Other income 62,427,611 0.3 73,971,785 0.2 142,576,089 0.2 Total income 20,495,459,197 100.0 33,343,932,266 100.0 65,892,285,646 100.0 Expenses Cost of sale of goods 18,738,411,726 91.4 30,143,950,504 90.4 69,764,980,902 105.9 Cost of rendering of services 654,044,333 3.2 691,957,405 2.1 485,040,455 0.7 Selling expenses 344,813,924 1.7 310,828,007 0.9 331,739,832 0.5 Administrative expenses 1,168,987,281 5.7 726,071,976 2.2 798,301,839 1.2 Management benefit expenses 74,710,653 0.4 75,539,582 0.2 133,151,158 0.2 Net foreign exchange loss - - - - 383,945,425 0.6 Provision for loss under onerous contracts (reversal) (83,048,422) (0.4) 83,048,422 0.2 (450,781,952) (0.7) Finance costs 2,388,348,622 11.7 1,711,317,198 5.1 3,586,832,743 5.5 Total expenses 23,286,268,117 113.6 33,742,713,094 101.2 75,033,210,402 113.9


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

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119

Statement of Income

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture For the year ended 31 December

2015 (Baht)

%

2014 (Restated) (Baht)

2013 %

(Baht)

%

Share of profit (loss) of equity-accounted investees Joint Venture (77,495,069) (0.4) (97,658,135) (0.3) 250,729,794 0.4 Loss before income tax expense from continuing operations (2,868,303,989) (14.0) (496,438,963) (1.5) (8,890,194,962) (13.5) Income tax benefits 7,855,195 0.0 25,445,720 0.1 1,907,137,410 2.9 Loss From continuing operations (2,860,448,794) (14.0) (470,993,243) (1.4) (6,983,057,552) (10.6) Discontinued operation Loss from discontinued operation (38,036,616,825) (185.6) (4,395,839,117) (13.2) - Loss for the year (40,897,065,619) (199.5) (4,866,832,360) (14.6) (6,983,057,552) (10.6) Loss attributable to: Owners of the Company (40,840,170,349) (199.3) (4,903,027,293) (14.7) (7,052,530,181) (10.7) Non-controlling interests (56,895,270) (0.3) 36,194,933 0.1 62,472,629 0.1 Loss for the year (40,897,065,619) (199.5) (4,866,832,360) (14.6) (6,983,057,552) (10.6) Loss per share Loss per share (1.27) (0.15) (0.24) Diluted loss per share (1.27) (0.15) (0.24) Loss per share – continuing operations Basic loss per share (0.09) (0.01) - Diluted loss per share (0.09) (0.01) -


120

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Key Financial Information

Statement of Comprehensive Income

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture For the year ended 31 December

2015 (Baht)

%

2014 (Restated) (Baht)

2013 %

(Baht)

%

Loss for the year (40,897,065,619) (199.5) (4,866,832,360) (14.6) (6,983,057,552) (10.6) Other comprehensive income Items that will never be reclassified to profit or loss Impairment loss on property, plant and equipment previously revalued (92,129,698) (0.4) - - - Depreciation on revaluation surplus (179,170,292) (0.9) (237,111,638) (0.7) (360,964,762) (0.5) Income tax on other comprehensive income 54,437,499 0.3 47,887,951 0.1 8,741,850 0.0 (216,862,491) (1.1) (189,223,687) (0.6) (352,222,912) (0.5) Items that may be reclassified subsequently to profit or loss Foreign currency translation differences for foreign operations (2,600,611,457) (12.7) (37,582,224) (0.1) 370,536,666 0.6 Reclassification of foreign currency differences following liquidation of subsidiary 2,045,056,070 10.0 - - - Revaluation of property, plant and equipment - The Group - - - - 324,593,031 0.5 - Joint venture - - - - 159,662,460 0.2 Defined benefit plan actuarial gains (losses) - The Group - - (13,387,790) 0.0 - - Joint venture - - 1,248,172 0.0 - Other comprehensive income for the year net of income tax (772,417,878) (3.8) (238,945,529) (0.7) 502,569,245 0.8 Total comprehensive income for the year (41,669,483,497) (203.3) (5,105,777,889) (15.3) (6,480,488,307) (9.8) Total comprehensive income attributable to: Owners of the Company (41,605,207,194) (203.0) (5,133,292,650) (15.4) (6,517,927,337) (9.9) Non-controlling interests (64,276,303) (0.3) 27,514,761 0.1 37,439,030 0.1 Total comprehensive income for the year (41,669,483,497) (203.3) (5,105,777,889) (15.3) (6,480,488,307) (9.8)


Key Financial Information

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

121

Statement of Cash Flows

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture For the year ended 31 December

2015 (Baht)

2014 (Baht)

2013 (Baht)

Cash flows from operating activities Loss for the year (40,897,065,619) (4,866,832,360) (6,983,057,552) Adjustments for Depreciation and amortisation 562,340,005 2,514,243,736 2,506,053,831 Finance costs 2,388,566,394 3,240,188,976 3,586,832,743 Unrealised gain on exchange rate (141,662,752) (359,079,411) (687,904,094) Bad debts and doubtful debts expenses (reversal) 34,938,353 42,109,600 (146,309,486) Provision for (reversal of) loss decline in value of inventories (239,138,758) 464,307,264 (140,649,895) Employee benefit obligations 26,131,059 24,453,337 19,508,940 Provision for loss under onerous contracts (reversal) (83,048,421) 237,679,931 (450,781,952) Loss (gain) on disposal of property, plant and equipment 3,292,889 (17,526,085) (286,103) Loss on revaluation of property, plant and equipment - - 12,744,833 Loss on impairment of property, plant and equipment 13,421,974 - (1,700,000) Loss recognised on the loss on liquidation of subsidiary 38,036,616,825 - - Reversal of short-term provision - (7,790,000) (4,045,195) Share of profit of Joint venture (net of income tax) 77,495,070 (301,942,389) (250,729,795) Gain on sales of investment in joint venture - - (362,779,468) Others - 9,273,933 47,959,281 Income tax expense (benefits) (7,855,195) (25,445,720) (1,907,137,413) (225,968,176) 953,640,812 (4,762,281,325)


122

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Key Financial Information

Statement of Cash Flows

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture For the year ended 31 December

2015 (Baht)

2014 (Baht)

2013 (Baht)

Changes in operating assets and liabilities Trade accounts receivable 27,553,133 (565,499,709) 1,299,668,179 Other accounts receivable from related parties (1,338,310,060) 913,676,880 34,130,690 Inventories 6,602,480,927 3,293,578,074 4,367,736,821 Other current assets 105,485,400 1,148,068,513 (1,817,785,234) Other non-current assets 19,741,111 1,441,901 3,379,784 Trade accounts payable (5,463,541,420) (913,251,624) 761,339,650 Other accounts payable to related parties (6,990,886) (1,294,367,981) 1,748,044,240 Other current liabilities 468,791,698 (931,476,012) (177,144,849) Employee benefit obligations paid (10,163,134) (4,180,349) (6,966,835) Other non-current liabilities (300,215) (300,215) (325,713) Income tax paid (39,424,638) (6,563,899) (26,148,462) Net cash provided by (used in) operating activities 139,353,740 2,594,766,391 (1,423,646,946) Cash flows from investing activities Proceeds from sale of investment in Joint venture - - 1,568,247,452 Deposits at financial institution pledged as collateral - (21,288,350) Purchases of property, plant and equipment (44,222,194) (740,129,104) (750,627,394) Purchases of intangible assets (15,995,747) (22,024,372) (144,619,447) Sales of property, plant and equipment 640,654 154,679,373 541,633 Machines and equipment acquired by means of finance lease - 38,840,888 Dividend received - 723,887,536 Currency translation differences - (97,402,121) (842,054,654) Net cash used in discontinued operation (164,964,557) - Net cash provided by (used in) investing activities (224,541,844) 36,563,850 (168,512,410)


Key Financial Information

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

123

Statement of Cash Flows

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture For the year ended 31 December

2015 (Baht)

2014 (Baht)

2013 (Baht)

Cash flows from financing activities Proceeds from issuance of ordinary shares - - 3,458,226,968 Transaction costs from issuance of ordinary shares - - (500,000) Finance cost paid (556,952,839) (2,900,139,035) (3,705,550,841) Increase in short-term loans from financial institutions (6,556,814) 352,247,343 1,066,268,051 Proceeds from short-term loans from related parties 929,000,000 547,367,939 Repayment of short-term loans from related parties (377,792,064) (123,000,000) Proceeds from long-term loans - - 156,805,770 Repayment of long-term loans (8,870,090) (235,523,400) (964,169,723) Hire purchase and finance lease payments (118,014,755) (60,008,601) (55,404,350) Machines and equipment acquired by means of finance lease 59,156,845 - Repurchase of subordinated convertible debenture (274,488) - (1,228,566,000) Dividends paid (29,400,000) (44,100,000) (66,150,000) Net cash provided by (used in) financing activities (109,704,205) (2,463,155,754) (1,339,040,125) Net increase (decrease) in cash and cash equivalents (194,892,309) 168,174,487 (83,905,589) Effect of exchange rate changes on balance held in foreign currency - 20,128,142 4,865,997 Cash and cash equivalents at 1 January 351,400,815 163,098,186 242,137,778 Cash and cash equivalents at 31 December 156,508,506 351,400,815 163,098,186


124

Key Financial Information

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Financial Ratio

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture For the year ended 31 December

2015 Liquidity Ratio Current ratio (Times) 0.14 Current ratio exclude long-term borrowings classified (Times) 0.34 Quick ratio (Times) 0.07 Quick ratio exclude long-term borrowings classified (Times) 0.08 Cash ratio (Times) 0.00 Accounts receivable turnover (Times) 3.84 Average collection period (Days) 94 1) Inventories turnover (Times) 2.81 Average days sales (Days) 128 Accounts payable turnover ratio (Times) 2.85 Accounts payable period (Days) 126 Cash cycle (Days) 96 Profitability Ratio Gross profit ratio 3.87% Operating profit ratio (3.59%) Other profit ratio 1.57% Operating cash flow margin ratio (Times) (0.19) Net profit ratio (202.45%) Return on equity ratio N/A Efficiency Ratio Return on assets ratio (77.12%) Return on fixed assets ratio (119.89%) Total assets turnover (Times) 0.39 Financial Policy Ratio Debt to equity ratio (Times) Interest bearing debt to equity (Times) Interest coverage ratio (Times) Debt service coverage ratio (Cash Basis) (Times) Dividend payout ratio 1) 2)

Inventories exclude spare parts 2013 Figures were before reclassification on a break-up basis.

N/A N/A 1.32 1.41 -

2014 (Restated)

2013 2)

0.33 0.48 0.08 0.12 0.05 6.02 60 2.27 158 2.63 137 82

0.64 0.64 0.12 0.12 0.03 11.95 31 3.60 101 5.75 64 68

6.82% 3.21% 0.75% 2.45 (14.82%) (67.84%)

(7.44%) (8.68%) 0.18% (0.25) (10.79%) (62.52%)

(6.05%) (4.88%) 0.41

(8.14%) (8.93%) 0.76

13.15 9.61 1.90 2.49 -

6.99 4.89 1.37 0.74

-


Key Financial Information

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

125

Per Share Data and Growth Rate

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture For the year ended 31 December

2015

2014 (Restated)

Per Share Data Book value per share (Baht) (1.15) 0.14 Earnings (Loss) per share (Baht) (1.27) (0.15) Dividend per share - - Growth Rate Total assets (62.89%) (8.82%) Total liabilities (9.59%) (3.14%) Revenue from sales and revenue from rendering of services (39.04%) (49.39%) Operating expenses 25.93% 47.15% Net profit (loss) (732.96%) 30.48%

2)

2013 Figures were before reclassification on a break-up basis.

2013 2)

0.30 (0.24) (4.29%) (1.06%) 7.89% (53.65%) 55.69%


126

Report on the Responsibility of the Board of Directors for 2015 Financial Report

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Report on the Responsibility of the Board of Directors for 2015 Financial Report

The Board of Directors of Sahaviriya Steel Industries Public Company Limited has duties and direct responsibilities to ensure that the Company’s activities comply with policies of good corporate governance. The Board of Directors also has responsibility for the preparation of the financial report of the Company, including financial statements of the Company, its subsidiaries and its joint venture for the year end 31 December 2015 as well as the financial information disclosed in the Company’s 2015 Annual Report. The financial statements have been prepared in accordance with generally accepted accounting principles with appropriate and consistent accounting policies and/or accounting practices as well as careful judgment in accounting estimates, along with all due consideration as to reasonableness. Material information has been sufficiently disclosed and audited by the independent certified public accountant approved by the Securities and Exchange Commission. Regarding the disclaimer of opinion on audit’s report proposed to shareholders of the Company for the year ended 31 December 2015, the Company has submitted a clarification letter to the Stock Exchange of Thailand and the Securities and Exchange Commission. The Company’s financial report has been prepared in accordance with the financial reporting standards. The Board of Directors has established the risk management system, internal control system and internal audit function under supervision of the Risk Management Committee and the Audit Committee consisting of independent directors, who are responsible for overseeing the Company’s control and audit functions to ensure the integrity and reliability of the Company’s financial statements. The true performance and financial position of the Company has been reflected on the Company’s financial statements for the benefit of its shareholders, investors, other stakeholders and all relevant parties. The Board of Directors considers that the internal control system, internal audit function and the financial statements of the Company are accurate in principle, reliable and in compliance with relevant laws and regulations.

Mr. Wit Viriyaprapaikit

Chairman of the Board of Directors

Mr. Win Viriyaprapaikit

Group CEO and President


Management Discussion and Analysis

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

127

Management Discussion and Analysis

Table 1: Summary of Consolidated Financial Results

Unit: Million Baht

2015 Jan - Dec

Sales and service revenues Cost of sales and service Gross profit (loss) SG & A Provision for loss under onerous contracts (reversal) EBITDA Interest expense Depreciation and amortisation Income tax (reversal) Realised FX gain (loss) Unrealised FX gain (loss) Profit (Loss) from Discontinued Operation Net profit (loss) EPS (Baht)

20,173 19,392 781 1,589 (83) (37,907) 2,379 562 (8) 118 142 (38,037) (40,840) (1.27)

- 2015 and 2014 operating performance excludes the Discontinued Operation, except for Net Loss. - EBITDA = Net (Loss) Profit + Interest + Tax + Depreciation and Amortisation

2014 Jan - Dec (Restated)

% YoY

33,092 30,836 2,256 1,112 83 (710) 1,704 2,514 (25) (182) 359 (4,396) (4,903) (0.15)

-39% -37% -65% +43% -200% N.A. +40% -78% +69% +165% -61% -765% -733% -733%


128

Management Discussion and Analysis

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Table 2: Financial Results by Business Unit

Unit: Million Baht

2015 Jan - Dec

1) 2)

2014 Jan - Dec (Restated)

% YoY

Sales and Service Revenues 20,173 33,092 Consolidated 1) HRC Business 19,612 32,382 Upstream Business 17,387 32,200 Port Business 145 139 Engineering Business 367 551

-39% -39% +4% -33%

EBITDA Consolidated (37,907) (710) HRC Business (64,333) 1,887 Upstream Business (35,793) (1,046) Port Business (5) 192 Engineering Business 7 (114) Elimination of Related Parties Transaction 62,216 (1,630)

N.A. N.A. -102% +106% -

Net Profit (Loss) (40,840) (4,903) Consolidated 2) HRC Business (67,124) (346) Upstream Business (38,404) (4,396) Port Business (127) 69 Engineering Business (18) (120) Elimination of Related Parties Transaction (64,888) (146) Non-controlling Interest (57) 36

-733% N.A. -284% +85% -

Revenues of each Business Unit are shown as net revenues after elimination of related party transactions. Profit/Loss from TCRSS is recorded under the equity method.


Management Discussion and Analysis

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

129

Table 3: Performance Highlight of HRC Business (the Company)

Unit: USD/ton

2015 Jan - Dec

Average Selling Price Average Cost of Goods Sold HRC Spread 1) HRC Rolling Margin 2) HRC EBITDA 3) Sales Volume (k tons) Production Volume (k tons)

491 484 59 12.0% (0.1) 1,126 1,057

2014 Jan - Dec

% YoY

679 625 125 18.4% 39.7 1,468 1,424

-28% -23% -53% -100% -23% -26%

HRC Spread excludes the provision for loss on decline in value of inventories or the reversal thereof. HRC Rolling Margin = HRC Spread/Average Selling Price 3) HRC EBITDA includes net stock loss provision (reversal) USD (7.9) per ton in 2015, and USD 11.1 per ton in 2014, but excludes loss recognised on the liquidation of subsidiary USD 1,583.6 per ton in 2015. 1) 2)

Table 4: Performance Highlight of Upstream Business (SSI UK)

Unit: USD/ton

2015 Jan - Sep

Average Selling Price Average Cost of Goods Sold Slab Spread 1) Slab Margin 2) Sales Volume (k tons) Slab Sales Volume to 3rd Party Customers (k tons) Slab Sales Portion to 3rd Party Customers Production Volume (k tons)

340 453 104 30.6% 1,975 1,494 76% 1,950

Slab Spread excludes the provision for loss on decline in value of inventories or the reversal thereof. Slab Margin = Slab Spread/Average Selling Price - SSI UK has been in liquidation proceeding since 2 October 2015. 1) 2)

2014 Jan - Dec

% YoY

511 538 183 35.8% 2,760 1,849 67% 2,760

-


130

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Management Discussion and Analysis

Figure 1: Sales and Service Revenues of the Company and its Subsidiaries Consolidated Sales and Service Revenues (Million Baht)

19,011

18,051

33,092 20,173

14,014

14,200

11,023

11,867

10,543 4,128

Q1/14

Q2/14

Q3/14

Q4/14

Q1/15

Q2/15

Q3/15

Q4/15

2014

2015

Except Q4/15, performance was based on the previous data before reclassification on a break-up basis.

Performance of the Company, its Subsidiaries and its Joint Venture

In 2015, the Company and its subsidiaries recorded sales and service revenues Baht 20,173 million, down 39% YoY following 1) exclusion of revenues from the Discontinued Operation and 2) a decrease in HRC Sales Volume and HRC Average Selling Price as the world steel prices had been dropping sharply. Group Sales Volume was 1,126 k tons. EBITDA was negative Baht 37,907 million and net loss was Baht 40,840 million, including loss from Discontinued Operation of Baht 38,037 million. Operating performance dropped YoY due to lower HRC Sales Volume and HRC Spread as well as loss from the Discontinued Operation as earlier explained. Negative EPS and negative profitability ratios are as shown in the table below. Profitability Ratio

NP Margin (%) ROA (%) ROE (%) EPS (Baht)

HRC Business (the Company) Revenues: In 2015, the Company recorded sales and service revenues Baht 19,612 million, down 39% YoY, with HRC Sales Volume of 1,126 k tons, down 23% YoY. Lower HRC Sales Volume was due to high import volume of downstream steel products such as steel pipes and galvanised steel sheet which affected HRC consumption. In addition, the world steel prices have been dropping sharply and there was uncertainty about the Company’s financial status during the early stage of the Company’s applying for Business Rehabilitation as earlier explained

2015

(202.4) (77.1) N.A. (1.27)

2014

(14.8) (6.1) (67.8) (0.15)

causing customers to temporarily prolong their orders in a wait-and-see situation. HRC Average Selling Price was Baht 17,705 ton or approx. USD 491 per ton, down 28% YoY following steel prices in the world market. Premium Value Products (PVPs) contributed to 36% of total HRC Sales Volume. Expenses: In 2015, the Company recorded Cost of sales and service Baht 19,044 million; comprising total cost of sales Baht 19,283 million and the reversal of provision for loss on decline in value of inventories Baht 239 million. Cost of sales and service decreased 37% YoY following lower HRC Sales Volume and raw materials cost. SG&A


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Management Discussion and Analysis

was Baht 1,452 million; up 56% YoY due to the penalty charges on the delay of VAT payment Baht 191 million, the demurrage charges Baht 190 million, and the reclassification on idle cost which is the fixed cost incurred from below normal production level to be part of SG&A expense in the amount Baht 65 million. There was the reversal of provision for loss under onerous contracts Baht 83 million. Interest Expense was Baht 2,348 million; up 40% YoY resulted from the accrued default interest rates recorded. There was loss recognised on the liquidation of subsidiary Baht 64,329 million, consisting of 1) impairment on investment in subsidiary Baht 27,482 million; 2) allowance for doubtful receivable from SSI UK Baht 5,958 million; 3) provision made for loss on guarantee and others from SSI UK Baht 30,534 million; and 4) provision made for goods-in-transit from SSI UK Baht 355 million. HRC Spread: In 2015, the Company recorded HRC Spread of 59 per ton or HRC Rolling Margin of 12.0%, down from USD 125 per ton in the same period of 2014. Profits: In 2015, the Company recorded gross profit Baht 568 million, negative HRC EBITDA Baht 64,333 million (excluding the reversal of provision for loss on decline

131

in value of inventories Baht 239 million, the reversal of provision for loss under onerous contracts Baht 83 million, and loss recognised on the liquidation of subsidiary Baht 64,329 million, Core EBITDA was negative Baht 326 million), and net loss Baht 67,124 million. Operating performance dropped YoY (where gross profit was Baht 2,089 million, EBITDA was positive Baht 1,887 million, and net loss was Baht 346 million) due to loss recognised on the liquidation of subsidiary, a decrease in HRC Sales Volume and HRC Spread, the penalty charges on the delay of VAT payment, the demurrage charges, the reclassification on idle cost which is the fixed cost incurred from below normal production level to be part of SG&A expense, and the default interest rates as earlier explained. HRC EBITDA/ton was negative USD 0.1 per ton (including the reversal of provision for loss on decline in value of inventories USD 5.9 per ton, and the reversal of provision of loss under onerous contracts USD 2.0 per ton, but excluding the recognised loss on the liquidation of subsidiary USD 1,583.6 per ton); down from positive EBITDA USD 39.7 per ton in the same period of 2014.

Figure 2: Revenues and EBITDA Margin of HRC Business Revenues (Million Baht) EBITDA Margin (%) 9%

7%

7%

6% -4%

10,170

Q1/14

8,602

7,845

Q2/14

Q3/14

-1%

1%

32,382 6%

-0.02% 19,612

-6%

5,765

5,446

5,252

4,904

4,010

Q4/14

Q1/15

Q2/15

Q3/15

Q4/15

2014

2015

(Including loss recognised on the liquidation of subsidiary, EBITDA Margin in Q3/2015, Q4/2015 and 2015 would be -1,307%, -5%, and -328%, respectively).


132

Management Discussion and Analysis

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Upstream Business (SSI UK) As SSI UK has been in liquidation proceeding since 2 October 2015. According to IAS 10: Events After the Reporting Period, the Group’s financial statements have been prepared on a break-up basis and SSI UK’s operating results for the period from 1 January 2015 to 2 October 2015 (the date on which TH ceased to have control) were reclassified and presented as Discontinued Operations, apart from the Continuing Operations, as follows: Unit: Thousand Baht

2015 2014 1 Jan - 2 Oct 1 Jan - 31 Dec

Results of Discontinued Operation Revenue 17,504,383 46,808,987 Expenses (26,372,051) (51,204,826) Results from Operating Activities (8,867,668) (4,395,839) Income tax - Results from Operating Activities, net of income tax (8,867,668) (4,395,839) Loss on derecognition of SSI UK following liquidation (29,168,949) Loss for the year (38,036,617) (4,395,839)

Port Business (PPC) Revenues: In 2015, PPC recorded total service revenues Baht 244 million, down 14% YoY following lower revenues from PPC Shore Crane and lower throughput volume resulted from a decrease in throughput volume of the Company and its subsidiaries. Profits: In 2015, PPC recorded gross profit Baht 105 million, negative EBITDA Baht 5 million, and net loss Baht 127 million, or down 19%, 102%, and 284% YoY respectively as a result of lower revenues, provision for loan granted to SSI UK, and the reversal of accrued interest receivable on loan granted to SSI UK, as well as an increase in interest expenses from higher amount of short term loan.


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Management Discussion and Analysis

133

Figure 3: Revenues and EBITDA Margin of Port Business Revenues (Million Baht) EBITDA Margin (%) 66%

61%

71%

72%

72%

75%

59%

53%

67

59

78

79

61

67

65

52

Q1/14

Q2/14

Q3/14

Q4/14

Q1/15

Q2/15

Q3/15

Q4/15

68% 283

2014

65% 244

2015

(Including losses from provision for loan granted to SSI UK, EBITDA Margin in Q3/2015 and 2015 would be -194% and -2% respectively).

Engineering Business (WCE) Revenues: In 2015, WCE recorded total sales and service revenues Baht 601 million, down 25% YoY due to the economy slowdown resulted in the delay of private investment. Revenues from external customers apart from the Company and its subsidiaries accounted for 61% of total sales and service revenues. Profits: In 2015, WCE recorded gross profit Baht 50 million; positive EBITDA Baht 7 million; and net loss Baht 18 million; improved 213%, 106% and 85% YoY respectively since there was no loss-making project as occurred last year, despite a sharp drop in revenues. Figure 4: Revenues and EBITDA Margin of Engineering Business Revenues (Million Baht) EBITDA Margin (%)

5% -11%

-11%

-2%

4%

803

7% -9%

223

229

199

152

160

167

166

108

Q1/14

Q2/14

Q3/14

Q4/14

Q1/15

Q2/15

Q3/15

Q4/15

-42%

601 -14%

1%

2014

2015


134

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Management Discussion and Analysis

CRC Business (TCRSS) Revenues: In 2015, TCRSS recorded total sales Baht 10,672 million, down 13% YoY due to a decrease in CRC Sales Volume by 2% YoY to 478k tons. CRC Average Selling Price dropped by 11% YoY to stay competitive against CRC imports such as South Korea and India. Profits: In 2015, TCRSS recorded gross profit Baht 441 million, EBITDA Baht 720 million and net profit Baht 124 million; up by 14%, 18%, and 5,671% YoY respectively due to a decrease in interest expenses from lower amount of short term loan and reduced average interest rate, as well as a rise in net foreign exchange gain. Figure 5: Revenues and EBITDA Margin of CRC Business Revenues (Million Baht) EBITDA Margin (%) 5%

9% 8%

8%

6%

7%

6%

12,287

3%

5%

10,672

0% 2,812

3,143

3,050

3,283

3,031

2,807

2,600

2,235

Q1/14

Q2/14

Q3/14

Q4/14

Q1/15

Q2/15

Q3/15

Q4/15

2014

2015

Consolidated Financial Status Assets As at 31 December 2015, the Company and its subsidiaries had total assets Baht 28,665 million, down 63% or Baht 48,587 million from 31 December 2014 mainly due to a decrease in trade accounts receivable and inventories. The details of total assets are as follows: Assets

31 Dec 2015 Million Baht %

31 Dec 2014 Million Baht %

31 Dec 2013 Million Baht %

Cash and cash equivalents Trade accounts receivable Inventories Property, plant and equipment Investments in joint venture Other assets

157 4,591 3,483 16,853 2,622 959

1 16 12 59 9 3

351 5,312 13,629 50,513 3,419 4,028

0 7 18 65 4 5

163 5,108 17,388 52,425 3,839 5,804

0 6 21 62 5 7

Total assets

28,665

100

77,252

100

84,726

100


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Management Discussion and Analysis

135

Trade accounts receivable: As at 31 December 2015, trade and notes receivable netted Baht 4,591 million, down 14% from the end of 2014; mainly as a result of the liquidation of Upstream Business in the United Kingdom. Inventories: As at 31 December 2015, inventory netted Baht 3,483 million, down 74% from to the end of 2014, as a result of the liquidation of Upstream Business and a decrease in cost and purchase volume of raw materials of HRC Business. Property, plant and equipment: As at 31 December 2015, Property, plant and equipment netted Baht 16,853 million, down 67% from the end of 2014.

Liabilities and Sources of Fund

Proportion of liabilities and total equity of the Company and its subsidiaries consist of: Liabilities and Equity

31 Dec 2015 Million Baht %

26,531

Current portion of interest-bearing debts Provision made for loss on guarantee given and others Trade accounts payable Non-current portion of interest-bearing debt Subordinated convertible debentures Environmental liabilities and others Deferred tax liabilities Other liabilities Equity attributable to owners of the Company Non-controlling interests

30,534 107 2,804 10 73 0 - 0 - 0 1,161 0 3,801 4 (36,946) 707

Total equity

(36,239)

-126

5,460

Total liabilities and equity

28,665

100

77,252

As at 31 December 2015, the Company and its subsidiaries had total liabilities Baht 64,904 million, down 10% from 31 December 2014, mainly as a result of the liquidation of Upstream Business and lower trade accounts payable from a decrease in purchase volume of raw materials of HRC Business. The Company and its subsidiaries had total interestbearing debts Baht 57,138 million, whilst net debt was Baht 56,981 million. These debts consisted of short-term borrowings and current portion of long-term interest-bearing debts Baht 57,065 million and long-term interest-bearing debts Baht 73 million. As at 31 December 2015, equity attributable to owners of the Company decreased to negative Baht 36,946 million as a result of loss from the Discontinued Operation of SSI UK Baht 38,037 million and the operating loss of the Group.

93

31 Dec 2014 Million Baht %

52,373

68

31 Dec 2013 Million Baht %

23,869

28

- 12,614 28,047 149 598 1,265 7,575 9,794 816

15 33 0 1 1 9

7

10,610

13

100

84,726

100

- - 10,803 14 102 0 0.3 0 601 1 1,216 2 6,697 9 4,660 800

Liquidity 1. Cash flow As at 31 December 2015, the Company and its subsidiaries’ ending cash was Baht 157 million, a decrease from net cash and cash equivalents of Baht 351 million at the end of 2014. Details of cash flow are as follows: • Net cash received from operating activities of Baht 139 million consisting of (1) cash outflows from operation Baht 226 million, and (2) cash inflows from net change in working capital of Baht 365 million mainly resulted from a reduction in inventories.


136

Management Discussion and Analysis

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

• Net cash used from investing activities of Baht 225 million was mainly from (1) cash outflows from purchase of property, plant and equipment of Baht 44 million (2) cash outflows on liquidation of subsidiary Baht 165 million, and (3) cash outflows from other activities of Baht 15 million. • Net cash used in financing activities was Baht 110 million; mainly consisting of (1) cash paid for finance costs Baht 557 million (2) net repayment on short-term and long-term loans Baht 15 million (3) net cash received from short-term loans from related parties Baht 551 million, and (4) cash paid for other financing activities Baht 89 million. 2. Current Ratio As of 31 December 2015, current ratio decreased from the end of 2014. Average collection period and average days sales improved as details below: Liquidity Ratio

2015

2014 (Restated)

2013

Current Ratio (x) Interest-bearing Debt to Equity Ratio (x) Average Collection Period (Days) Average Days Sales (Days)

0.14 N.A. 90 161

0.33 9.61 57 184

0.64 4.89 31 101

Current Ratio: As of 31 December 2015, current ratio was 0.14x; decreased from 0.33x at the end of 2014, mainly from lower value of inventories and trade accounts receivable from the liquidation of Upstream Business as well as a decrease in cost and purchase volume of raw materials of HRC Business as earlier explained.

Stock Price The stock’s lowest trading price of the Company during the year 2015 was Baht 0.03 per share, and the highest trading price was Baht 0.31 per share. Average daily trading volume was 81.4 million shares, and average daily trading value was Baht 9.3 million with average trading price Baht of 0.11 per share. The closing price on the last trading day in 2015 of the Stock Exchange of Thailand on 30 December 2015 was Baht 0.04 per share.


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Financial Report

137


138

Independent Auditor’s Report

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Independent Auditor’s Report To the Shareholders of Sahaviriya Steel Industries Public Company Limited I was engaged to audit the accompanying consolidated and separate financial statements of Sahaviriya Steel Industries Public Company Limited, its subsidiaries, and its joint-venture (the “Group”), and of Sahaviriya Steel Industries Public Company Limited (the “Company”), respectively, which comprise the consolidated and separate statements of financial position as at 31 December 2015, the consolidated and separate statements of income, comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Consolidated and Separate Financial Statements Management is responsible for the preparation and fair presentation of these consolidated and separate financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility My responsibility is to express an opinion on these financial statements. Because of the matters described in the Basis for Disclaimer of Opinion paragraph, however, I was not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion.


Independent Auditor’s Report

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

139

Basis for Disclaimer of Opinion

Limitation of Audit Scope Liquidation of Sahaviriya Steel Industries UK Limited (“SSI UK”) SSI UK is wholly-owned by the Company. As disclosed in Notes 2 and 8, since the establishment of SSI UK and until 2 October 2015, when SSI UK entered the liquidation process, the consolidated financial statements of the Group include the financial statements of SSI UK. A petition for winding up SSI UK was lodged and the application was granted on 2 October 2015 and SSI UK’s financial statements for Group consolidation purposes as at that date were prepared on a break-up basis. Consequent to the appointment of a liquidator for SSI UK, the Company no longer controls the business or operations of SSI UK and, therefore, the financial statements of SSI UK have not been included in the consolidated financial statements of the Group from 2 October 2015. The results of the coke manufacturing and steel making business of SSI UK for the period to 2 October 2015 have been recorded separately in the consolidated statement of income of the Group for the year ended 31 December 2015 as discontinued operations. As disclosed in Note 2, the commencement of liquidation of SSI UK has resulted in its assets being frozen; access to its manufacturing facilities, in which most of its accounting records and related supporting documents are located, blocked; and key personnel in financial reporting being dismissed. Consequently, management has prepared the financial statements of SSI UK for the purpose of presentation and disclosure of discontinued operations in the consolidated statement of income of the Group for the year ended 31 December 2015 based on SSI UK’s management accounts and related reports made up to 31 August 2015 and estimates for the remaining period to 2 October 2015, using all relevant information available to the Group to date. Due to the limitation on the scope of my audit imposed by the above circumstances I was unable to carry out satisfactory audit procedures to conclude whether the recognition and presentation in the consolidated statement of income and disclosure in Note 8 relating to discontinued operations is prepared, in all material respects, in accordance with Thai Financial Reporting Standards.


140

Independent Auditor’s Report

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Material Uncertainty Concerning Going Concern Basis of Accounting As disclosed in Notes 2(e) and 8 to the financial statements, during the year ended 31 December 2015, the Group incurred a net loss of Baht 40,897 million (includes losses from the discontinuation of SSI UK’s operation of Baht 38,037 million) and as at 31 December 2015 the Group had a cumulative deficit of Baht 68,526 million and its current liabilities exceeded its current assets by Baht 54,496 million. As at the same date and for the same period, the Company incurred a net loss of Baht 67,124 million (including losses from the liquidation of SSI UK of Baht 64,329 million); had cumulative deficit of Baht 68,299 million; and current liabilities exceeded current assets by Baht 54,325 million. As disclosed in note 8 to the financial statements, pursuant to the discontinuation of SSI UK’s operations the major lenders demanded immediate payment of the remaining balance of a loan carried at USD 815 million (equivalent to Baht 30,034 million as at 31 December 2015) which was primarily secured by SSI UK’s property, plant and equipment and guaranteed by the Company. The major lenders also demanded the Company to be responsible for this obligation as guarantor. In addition, on 1 October 2015 the major lenders demanded immediate payment of the remaining balance of another of the Company’s loan carried at Baht 9,840 million as at 31 December 2015. In view of this situation, on 1 October 2015 the Board of Directors of the Company approved for the Company to submit an application for Business Rehabilitation to the court. These circumstances indicate the existence of a material uncertainty which casts significant doubt about the Group’s and the Company’s ability to continue as going concerns. Management has the opinion that despite the above circumstances, the Group and the Company should be able to generate sufficient cash flows from future operations to cover operating costs and to meet financing commitments. This opinion is based on the discontinuation of SSI UK’s operation, which had been incurring losses, the commencement and implementation of the business rehabilitation plan, and the support of the major lenders. The consolidated and separate financial statements have been prepared by management on the going concern basis on the assumption that the business rehabilitation will be successful and such further capital and credit facilities will be secured to the extent that the Group’s and the Company’s operations require. The validity of this assumption is, however, dependent on 1) the success of the business rehabilitation plan, which had not commenced at the date of this report, including the measures taken to improve profitability and cash flows; 2) the successful outcome of the Group’s negotiations with its major lenders in debt restructuring; and 3) the availability of financing from other sources to meet funding requirements. I consider that, whilst adequate disclosures have been made in this regard, these matters give rise to significant doubt about the Group’s and the Company’s ability to continue as going concerns. If the Group and the Company were unable to continue as going concerns, the realisable value of assets may be significantly less than their carrying value. No adjustments to the classification or carrying value of assets and liabilities have been made in the consolidated and separate financial statements should the Group and the Company not be able to continue as going concerns.


Independent Auditor’s Report

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

141

Material Uncertainty Other than Going Concern As disclosed in Note 2 to the financial statements, on 1 October 2015, the Board of Directors of the Company approved the Company to submit a petition for Business Rehabilitation to the Central Bankruptcy Court. The Court scheduled the inquiry on the petition to testify on the court proceeding on 21 December 2015 and the next inquiry date will be on 17 February 2016. As at the date of this report, the Court’s examination and consideration to order the Company for Business Rehabilitation had not been concluded. Such circumstance indicates the existence of a material uncertainty as to whether the court will accept the Company for Business Rehabilitation and thereby enable commencement of the business rehabilitation plan as planned. It also casts doubt about the classification and measurement of liabilities and provisions. Disclaimer of Audit Opinion Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraph, I am not in a position to, and do not, express an opinion on the financial statements. Emphasis of Matter I draw attention to Note 4 to the accompanying financial information. During the year ended 31 December 2015, the Group and the Company sold goods to related companies and joint venture in the normal course of business totaling Baht 18,565 million and Baht 7,899 million, respectively, which represented 51% of the Group’s total sales and which represented 41% of the Company’s total sales for those periods, respectively. As at 31 December 2015, the Group’s and the Company’s outstanding trade accounts receivable from those related parties amounted to Baht 4,564 million and Baht 4,547 million, respectively. Moreover, during the year ended 31 December 2015, the Group and the Company purchased goods from related companies in the normal course of business totaling Baht 15,175 million and Baht 7,682 million, respectively, which represented 34% of the Group’s total purchases and which represented 40% of the Company’s total purchases for those periods, respectively.

KPMG Phoomchai Audit Ltd. Bangkok 15 February 2016

Sureerat Thongarunsang Certified Public Accountant Registration No. 4409


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Statement of Financial Position

142

Statement of Financial Position

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint venture Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture As at 31 December Statement of financial position

Assets

Note Note

Assets

Consolidated Consolidated financial financial statements statements

2015 31 December

2015

2014 2014

Unit: Baht Separate financial financial statements statements Separate 2015 31 December 2014

2015

2014

(in Baht)

Current assets Cash and cash equivalents

5

Trade accounts receivable

4,6

156,508,506

351,400,815

44,536,982

10,677,858

4,590,821,162

5,311,902,438

4,545,033,945

4,570,560,879

Other accounts receivable from related parties

4

532,521,538

1,310,416,921

540,806,870

4,371,762,878

Inventories

7

3,483,343,439

13,628,691,848

3,474,189,613

10,137,418,056

Other current assets

4

197,564,544

2,406,515,640

139,701,737

299,983,082

Assets held for disposal following liquidation of subsidiary

2(e)

Total current assets

-

-

8,960,759,189

23,008,927,662

12,720,143

21,288,350

8,744,269,147

19,390,402,753

Non-current assets Restricted deposit at financial institution

15

Long-term receivable from a related party

4

-

-

Investments in subsidiaries

9

-

-

Investments in joint venture

11

Other long-term investment

12

Property, plant and equipment

13

Intangible assets Deferred tax assets

2,621,770,381 -

3,418,594,342 -

-

630,756,064

278,999,930

27,760,791,887

3,159,668,346

3,159,668,346

-

-

16,853,312,928

50,513,059,433

15,078,554,786

15,651,585,716

158,975,157

245,303,285

149,296,495

165,148,608

45,121,952

32,277,450

12,107,442

12,414,658

7,813,721

7,654,988

Total non-current assets

19,704,008,003

54,242,937,518

18,674,333,278

47,375,605,609

Total assets

28,664,767,192

77,251,865,180

27,418,602,425

66,766,008,362

Other non-current assets

14

The accompanying notes are an integral part of these financial statements.

The accompanying notes are an integral part of these financial statements. 4

-

-


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Statement of Financial Position

143

Statement of Financial Position (continued) Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint venture Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture As at 31 December Statement of financial position

Liabilities and equity

Note Note

Consolidated financial statements Consolidated financial statements

2015 31 December 2014

2015

2014

Liabilities and equity

Unit: Baht Separate financial financialstatements statements Separate 2015 31 December 2014

2015

2014

(in Baht)

Current liabilities Bank overdrafts and short-term loans from financial institutions and from related parties 15 Trade accounts payable Other accounts payable from related parties

12,796,099,840

22,638,350,536

12,533,671,330

11,948,235,312

2,804,253,376

10,802,757,605

2,795,400,158

8,235,075,742

4

21,836,192

889,582,036

36,684,568

34,900,801

15

7,033,461,665

7,639,329,476

7,033,461,665

5,736,331,755

15

6,629,284,761

22,034,033,707

6,629,284,761

7,916,544,081

4,16

Current portion of long-term loans from financial institutions Long-term borrowings classified as current liabilities Subordinated convertible debentures

15

Current portion of finance lease liabilities

15

Current portion of hire purchase liabilities

15

-

236,070

-

68,763,059

54,692,504

-

3,629,691

6,601,542

2,911,616

236,070 4,732,326

Provision made for loss on guarantee given and others Provision for onerous contracts

2(e) 32

Income tax payable Other current liabilities

30,533,752,034 -

17

Total current liabilities

575,188,520 1,355,209

30,533,752,034 -

83,048,422 -

3,566,049,863

5,034,991,788

3,503,658,732

1,093,658,055

63,457,130,481

69,677,118,993

63,068,824,864

35,052,762,564

Non-current liabilities Finance lease liabilities

15

72,005,250

98,226,864

Hire purchase liabilities

15

1,003,263

3,338,283

843,111

2,460,056

Employee benefit obligations

18

211,276,457

195,308,532

160,394,876

146,784,463

Environmental liabilities and others Deferred tax liabilities Other non-current liabilities Total non-current liabilities Total liabilities

14

600,563,651

-

-

-

-

1,161,437,602

1,216,177,430

1,091,093,289

1,142,079,436

917,315

1,217,528

823,876

823,876

1,446,639,887

2,114,832,288

1,253,155,152

1,292,147,831

64,903,770,368

71,791,951,281

64,321,980,016

36,344,910,395

The accompanying notes are an integral part of these financial statements.

The accompanying notes are an integral part of these financial statements. 5


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Statement of Financial Position

144

Statement of Financial Position (continued) Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture and its Joint venture As at 31 December Statement of financial position

Liabilities and equity

Note Note

Liabilities and equity (continued)

Unit: Baht Separatefinancial financialstatements statements Separate

Consolidated financial statements Consolidated financial statements

2015 31 December 2014

2015

2015 31 December 2014

2014

2015

2014

(in Baht)

Equity Share capital

20

Authorised share capital

50,263,663,124

39,867,778,559

50,263,663,124

39,867,778,559

Issued and paid-up share capital

32,166,262,124

32,166,258,124

32,166,262,124

32,166,258,124

(5,678,076,131)

(5,678,076,131)

(5,678,076,131)

(5,678,076,131)

Discount on ordinary shares issuance

20

Equity distribution from shareholders from repurchase of subordinated convertible debentures Convertible rights

19 19

366,207,178

366,219,977

-

24,779

366,207,178 -

366,219,977 24,779

Revaluation surplus - The Group - Joint venture Currency translation differences

21

4,102,902,362

4,315,634,500

92,686,173

99,906,412

-

-

555,555,387

-

-

-

4,011,432,368

4,214,781,729

Retained earnings (deficit) Appropriated Legal reserve

21

Unappropriated (deficit)

530,226,819

530,226,819

530,226,819

530,226,819

(68,525,918,318)

(27,695,817,978)

(68,299,429,949)

(1,178,337,330)

(36,945,709,793)

4,659,931,889

(36,903,377,591)

30,421,097,967

Equity attributable to owners of the Company Non-controlling interests Capital deficiency/total equity Total liabilities and equity

10

706,706,617

799,982,010

-

-

(36,239,003,176)

5,459,913,899

(36,903,377,591)

30,421,097,967

28,664,767,192

77,251,865,180

27,418,602,425

66,766,008,362

The accompanying notes are an integral part of these financial statements.

The accompanying notes are an integral part of these financial statements. 6


rt

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Statement of Income

145

Statement of Income

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture For the year ended 31 December financial statements Sahaviriya Steel Industries Public CompanyConsolidated Limited, its Subsidiaries 2015 2014 and its Joint venture (Restated) Note

Unit: Baht Separate financial statements 2015

2014

Statement of income

Continuing operations Income Revenue from sale of goods

4,29

19,255,060,580

32,316,180,884

19,254,300,305

32,316,271,375

Revenue from rendering of services

4,29

917,943,960

776,216,087

357,277,419

65,303,772

260,027,046

177,563,510

259,329,706

92,348,370

Net foreign exchange gain Dividend income Other income

4,9 4

Total income

30,600,000

83,399,990

62,427,611

-

73,971,785

-

72,760,694

92,089,140

20,495,459,197

33,343,932,266

19,974,268,124

32,649,412,647

Expenses Cost of sale of goods Cost of rendering of services Selling expenses Administrative expenses

18,738,411,726

30,143,950,504

18,806,653,890

30,243,022,137

4

654,044,333

691,957,405

236,863,987

49,543,489

4,23

344,813,924

310,828,007

335,797,108

298,509,013

1,168,987,281

726,071,976

1,061,186,010

568,703,352

4,7

24

Loss recognised on the liquidation of subsidiary Management benefit expenses

2(e) 4,25

74,710,653

75,539,582

64,328,526,170 55,003,451

63,171,570

Provision for loss under onerous contracts (reversal)

32

Finance costs

4,27

Total expenses

(83,048,422)

83,048,422

(83,048,422)

83,048,422

2,388,348,622

1,711,317,198

2,356,947,856

1,689,684,358

23,286,268,117

33,742,713,094

87,097,930,050

32,995,682,341

(77,495,069)

(97,658,135)

(2,868,303,989)

(496,438,963)

Share of profit (loss) of equity-accounted investees Joint venture

11

Loss before income tax expense

(67,123,661,926)

(346,269,694)

from continuing operations Income tax benefits

28

Loss from continuing operations

7,855,195

25,445,720

(2,860,448,794)

(470,993,243)

(38,036,616,825)

(4,395,839,117)

(40,897,065,619)

(4,866,832,360)

148,807 (67,123,513,119)

(346,269,694)

Discontinued operation Loss from discontinued operation Loss for the year

8

The accompanying notes are an integral part of these financial statements.

(67,123,513,119)

(346,269,694)


Annual Report 2015

Statement ComprehensivePublic Income Company Limited, its Subsidiaries 146 Sahaviriya Steel ofIndustries Sahaviriya Steel Industries Public Company Limited and its Joint venture Statement of comprehensive income

Statement of Comprehensive Income Consolidated

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Jointstatements Venture financial For the year ended 31 December For the year ended

For the year ended

Unit: Baht 31 December Separate financial statements 2015 2014

31 December

Consolidated financial statements 2015 2014

Note

2015

2014 (Restated)

Note

Separate

financial statements

2015

(Restated)

2014

(in Baht) Loss attributable to: Owners of the Company

(40,840,170,349)

Non-controlling interests

(4,903,027,293)

(56,895,270)

Loss for the year

(40,897,065,619)

36,194,933 (4,866,832,360)

(67,123,513,119) (67,123,513,119)

(346,269,694) (346,269,694)

Loss per share Basic loss per share

(1.27)

(0.15)

(2.09)

(0.01)

(1.27)

(0.15)

(2.09)

(0.01)

Basic loss per share

(0.09)

(0.01)

(2.09)

(0.01)

Diluted loss per share

(0.09)

(0.01)

(2.09)

(0.01)

Diluted loss per share

30

Loss per share continuing operations

The accompanying notes are an integral part of these financial statements.

8

The accompanying notes are an integral part of these financial statements.


Annual Report 2015

Statement of Comprehensive Income Sahaviriya Steel Industries Public Company Limited Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint venture

147

Statement of Comprehensive Income (continued) Statement of comprehensive income

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and itsConsolidated Joint Venture financial statements For the year ended 31 December

Separate

financial statements

Unit: Baht 31 financial Decemberstatements Separate

For the year ended

For the year ended

31 December Consolidated financial statements 2014 2014 (Restated) (Restated)

2015 2015 Note Note

2015 2015

2014 2014

(in Baht) Loss for the year

(40,897,065,619)

(4,866,832,360)

(67,123,513,119)

(346,269,694)

Other comprehensive income Items that will never be reclassified to profit or loss Impairment loss on property, plant and equipment previosly revalued

(92,129,698)

Depreciation on revaluation surplus Income tax on other comprehensive income

ď€ ď€‚

-

(92,129,698)

-

(179,170,292)

(237,111,638)

(159,636,502)

(214,989,900)

54,437,499

47,887,951

50,837,339

43,623,376

(216,862,491)

(189,223,687)

(200,928,861)

(171,366,524)

(2,600,611,457)

(37,582,224)

Items that may be reclassified subsequently to profit or loss Foreign currency translation differences for foreign operations

-

-

-

-

Reclassification of foreign currency differences following liquidation of subsidiary

2(e)

2,045,056,070

-

Defined benefit plan actuarial gains (losses) - The Group

-

(13,387,790)

-

- Joint venture

-

1,248,172

-

(15,959,792) -

Other comprehensive income for the year net of income tax Total comprehensive income for the year

(772,417,878)

(238,945,529)

(200,928,861)

(187,326,316)

(41,669,483,497)

(5,105,777,889)

(67,324,441,980)

(533,596,010)

(41,605,207,194)

(5,133,292,650)

(67,324,441,980)

(533,596,010)

Total comprehensive income attributable to: Owners of the Company Non-controlling interests Total comprehensive income for the year

(64,276,303) (41,669,483,497)

27,514,761 (5,105,777,889)

The accompanying notes are an integral part of these financial statements.

9 The accompanying notes are an integral part of these financial statements.

(67,324,441,980)

(533,596,010)


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Statement of Changes in Equity

148

Statement of Changes in Equity Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture For the year ended 31 December

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint venture

Unit: Baht

Sahaviriya Steel Industries Statement of changes in equity Public Company Limited, its Subsidiaries and its Joint venture Statement of changes in equity

Issued and Issued and paid-up

Discount on Discount on ordinary shares

paid-up share capital share capital Year ended 31 December 2014 Year ended December Balance at 131 January 20142014 Balance at 1 January 2014

Transactions with owners, recorded directly Transactions in equity with owners, recorded directly in equity paid to non-controlling interests Dividends Dividends paid to non-controlling interests Total transactions with owners, recorded Total transactions directly in equitywith owners, recorded directly in equity

Comprehensive income for the year Comprehensive Profit (loss) income for the year

Profit Other (loss) comprehensive income (loss) Other comprehensiveincome incomefor (loss) Total comprehensive the year Total comprehensive income for the year Transfer to retained earnings (deficit) Transfer retainedproperty, earnings (deficit) Write offtorevalued plant Write off revalued property, plant and equipment and equipment Balance at 31 December 2014 Balance at 31 December 2014

ordinary shares issuance issuance

Consolidated financial statements Retained earnings (deficit) Retained earnings (deficit)

Equity distribution Equity distribution from shareholders from fromshareholders repurchase from repurchase of subordinated

of subordinated convertible debentures convertible debentures

Convertible rights Convertible rights

Legal Legal reserve

Consolidated financial statements Consolidated financial statements

reserve

Revaluation surplus Revaluation surplus

Currency Currency translation

Unappropriated Unappropriated (deficit)

translation differences differences (in Baht)

(deficit)

Other components of equity Other components of equity

Joint Joint venture

The Group The Group

Equity Equity to attributable attributable owners ofto

Total other Total other components components of equity of equity

venture

NonNoncontrolling controlling interests

owners of the Company the Company

interests

Total Total equity equity

(in Baht) 32,166,258,124 32,166,258,124

(5,678,076,131) (5,678,076,131)

366,219,977 366,219,977

24,779 24,779

530,226,819 530,226,819

(22,789,391,004) (22,789,391,004)

593,137,611 593,137,611

4,500,473,668 4,500,473,668

104,851,834 104,851,834

5,198,463,113 5,198,463,113

9,793,725,677 9,793,725,677

816,066,121 816,066,121

10,609,791,798 10,609,791,798

-

-

-

-

-

-

-

-

-

-

-

(44,100,010) (44,100,010)

(44,100,010) (44,100,010)

-

-

-

-

-

-

-

-

-

-

-

(44,100,010) (44,100,010)

(44,100,010) (44,100,010)

--

--

--

--

--

36,194,933 36,194,933 (8,680,172)

(4,866,832,360) (4,866,832,360) (238,945,529)

--

32,166,258,124 32,166,258,124

--

(5,678,076,131) (5,678,076,131)

--

366,219,977 366,219,977

The accompanying notes are an integral part of these financial statements.

--

24,779 24,779

--

530,226,819 530,226,819

(4,903,027,293) (4,903,027,293) (12,041,028) (12,041,028) (4,915,068,321) (4,915,068,321)

8,641,347 8,641,347 (27,695,817,978) (27,695,817,978)

(37,582,224) (37,582,224) (37,582,224)

(180,642,105) (180,642,105) (180,642,105)

555,555,387 555,555,387

(4,197,063) (4,197,063) 4,315,634,500 4,315,634,500

(37,582,224)

(180,642,105)

--

--

(4,945,422) (4,945,422) 99,906,412 99,906,412

(218,224,329) (218,224,329) (218,224,329)

(4,903,027,293) (4,903,027,293) (230,265,357)

(218,224,329)

(230,265,357) (5,133,292,650) (5,133,292,650)

(9,142,485) (9,142,485) 4,971,096,299 4,971,096,299

(501,138) (501,138) 4,659,931,889 4,659,931,889

(8,680,172) 27,514,761 27,514,761

501,138 501,138 799,982,010 799,982,010

(238,945,529) (5,105,777,889) (5,105,777,889)

5,459,913,899 5,459,913,899


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Statement of Changes in Equity

149

Statement of Changes in Equity (continued) Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture For the year ended 31 December

Unit: Baht

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint venture

Sahaviriya Steel Industries Statement of changes in equity Public Company Limited, its Subsidiaries and its Joint venture Statement of changes in equity

Issued and Issued and paid-up

Note Note

Discount on Discount on ordinary shares

paid-up share capital share capital

ordinary shares issuance issuance

Consolidated financial statements Retained earnings (deficit) Retained earnings (deficit)

Equity distribution Equity distribution from shareholders from fromshareholders repurchase from repurchase of subordinated

of subordinated convertible debentures convertible debentures

Convertible rights Convertible rights

Legal Legal reserve

Consolidated financial statements Consolidated financial statements

reserve

Revaluation surplus Revaluation surplus

Currency Currency translation

Unappropriated Unappropriated (deficit)

translation differences differences (in Baht)

(deficit)

Other components of equity Other components of equity

Joint Joint venture

The Group The Group

Equity Equity to attributable attributable owners ofto

Total other Total other components components of equity of equity

venture

NonNoncontrolling controlling interests

owners of the Company the Company

interests

Total Total equity equity

799,982,010 799,982,010

5,459,913,899 5,459,913,899

(in Baht)

Year ended 31 December 2015 Year ended December Balance at 131 January 20152015

32,166,258,124 32,166,258,124

Balance at 1 January 2015

(5,678,076,131) (5,678,076,131)

366,219,977 366,219,977

24,779 24,779

530,226,819 530,226,819

(27,695,817,978) (27,695,817,978)

555,555,387 555,555,387

4,315,634,500 4,315,634,500

99,906,412 99,906,412

4,971,096,299 4,971,096,299

4,659,931,889 4,659,931,889

Transactions with owners, recorded directly Transactions in equity with owners, recorded directly in equity Issue of ordinary shares Issue of ordinary shares Repurchase and cancellation of subordinated

Repurchase cancellation of subordinated convertibleand debentures convertible debentures Dividends paid to non-controlling interests Dividends paid to non-controlling interests Total transactions with owners, recorded Total transactions directly in equitywith owners, recorded directly in equity Comprehensive income for the year Comprehensive Profit (loss) income for the year

Profit Other (loss) comprehensive income (loss) Other comprehensiveincome incomefor (loss) Total comprehensive the year Total comprehensive income for the year Transfer to retained earnings (deficit) Transfer retainedproperty, earnings (deficit) Write offtorevalued plant

Write off revalued property, plant and equipment and equipment Balance at 31 December 2015 Balance at 31 December 2015

20 20

4,000 4,000

-

-

-

19 19

-

-

(12,799) (12,799) -

(24,779) (24,779) -

4,000 4,000

-

(12,799) (12,799)

-

-

-

--

32,166,262,124 32,166,262,124

-

--

(5,678,076,131) (5,678,076,131)

--

366,207,178 366,207,178

The accompanying notes are an integral part of these financial statements.

-

-

-

-

-

-

-

-

-

-

-

-

-

(24,779) (24,779)

-

-

-

-

-

-

-

-

--

--

--

530,226,819 530,226,819

(40,840,170,349) (40,840,170,349) -

(40,840,170,349) (40,840,170,349)

10,070,009 10,070,009 (68,525,918,318) (68,525,918,318)

(555,555,387) (555,555,387) (555,555,387)

(209,481,458) (209,481,458) (209,481,458)

(555,555,387)

(209,481,458)

--

(3,250,680) (3,250,680) 4,102,902,362 4,102,902,362

-

--

(7,220,239) (7,220,239) 92,686,173 92,686,173

4,000 4,000

-

4,000 4,000

(37,578) (37,578) -

(29,400,000) (29,400,000)

(37,578) (37,578) (29,400,000) (29,400,000)

(33,578) (33,578)

(29,400,000) (29,400,000)

(29,433,578) (29,433,578)

(40,840,170,349) (40,840,170,349) (765,036,845)

(56,895,270) (56,895,270) (7,381,033)

(40,897,065,619) (40,897,065,619) (772,417,878)

(765,036,845)

(765,036,845) (41,605,207,194) (41,605,207,194)

(10,470,919) (10,470,919) 4,195,588,535 4,195,588,535

(400,910) (400,910) (36,945,709,793) (36,945,709,793)

400,910 400,910 706,706,617 706,706,617

(36,239,003,176) (36,239,003,176)

(765,036,845) (765,036,845) (765,036,845)

(7,381,033) (64,276,303) (64,276,303)

(772,417,878) (41,669,483,497) (41,669,483,497)


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Statement of Changes in Equity

150

Statement of Changes in Equity (continued) Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint venture For the year ended 31 December Statementsof changes in equity

Unit: Baht Separate financial statements Separate financial statements

Retained earnings (deficit)

Equity distribution

Issued and

Discount on

paid-up

share capital Year ended 31 December 2014 Balance at 1 January 2014

Comprehensive income for the year Loss

Other comprehensive income

Total comprehensive income for the year

32,166,258,124

-

-

-

ordinary shares issuance

(5,678,076,131)

-

-

-

Other components of equity

from shareholders from repurchase of subordinated

convertible debentures

366,219,977

-

-

-

Total Convertible rights

24,779

-

-

-

Legal

reserve

(in Baht) 530,226,819

Unappropriated (deficit)

(819,234,827)

-

(346,269,694)

-

(362,229,486)

-

Revaluation

other

surplus

components of equity

equity

4,389,275,236

4,389,275,236

30,954,693,977

-

-

(15,959,792)

(171,366,524)

(171,366,524)

3,126,983 (1,178,337,330)

(3,126,983) 4,214,781,729

(3,126,983) 4,214,781,729

(171,366,524)

(171,366,524)

Total

(346,269,694)

(187,326,316)

(533,596,010)

Transfer to retained earnings (deficit) Write off revalued property, plant

and equipment Balance at 31 December 2014

32,166,258,124

The accompanying notes are an integral part of these financial statements.

(5,678,076,131)

366,219,977

24,779

530,226,819

30,421,097,967


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Statement of Changes in Equity

151

Statement of Changes in Equity (continued) Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint venture Sahaviriya Steel For the year ended 31 Industries December Public Company Limited, its Subsidiaries and its Joint venture Statementsof Statementsof changes changes in in equity equity

Unit: Baht Separate financial statements

Note Note Year Year ended ended 31 31 December December 2015 2015 Balance at at 1 1 January January 2015 2015 Balance Transactions Transactions with with owners, owners, recorded recorded directly directly in equity in equity Issue of of ordinary ordinary shares shares Issue Repurchase and and cancellation cancellation of of subordinated subordinated Repurchase

convertible debentures convertible debentures Total transactions Total transactions with with owners, owners, recorded recorded directly in equity directly in equity Comprehensive income income for for the the year year Comprehensive Loss Loss

Other Other comprehensive comprehensive income income Total comprehensive Total comprehensive income income for for the the year year Transfer to to retained retained earnings earnings (deficit) (deficit) Transfer Write off revalued property, plant Write off revalued property, plant and and equipment equipment Balance Balance at at 31 31 December December 2015 2015

Issued and and Issued paid-up paid-up

share share capital capital

32,166,258,124 32,166,258,124

Discount Discount on on ordinary shares shares ordinary issuance issuance

(5,678,076,131) (5,678,076,131)

Equity Equity distribution distribution from from shareholders shareholders from repurchase repurchase from of subordinated subordinated of

convertible convertible debentures debentures

366,219,977 366,219,977

Separate financial financial statements statements Separate Retained Retained earnings earnings (deficit) (deficit)

Convertible Convertible rights rights

24,779 24,779

Legal Legal reserve reserve (in (in Baht) Baht) 530,226,819 530,226,819

Other Other components components of of equity equity

Unappropriated Unappropriated (deficit) (deficit)

(1,178,337,330) (1,178,337,330)

Revaluation Revaluation surplus surplus

4,214,781,729 4,214,781,729

Total Total other other

components components of of equity equity

Total Total equity equity

4,214,781,729 4,214,781,729

30,421,097,967 30,421,097,967

20 20

4,000 4,000

--

--

--

--

--

--

--

4,000 4,000

19 19

--

--

(12,799) (12,799)

(24,779) (24,779)

--

--

--

--

(37,578) (37,578)

4,000 4,000

--

(12,799) (12,799)

(24,779) (24,779)

--

--

--

--

(33,578) (33,578)

---

---

---

---

---

--

-32,166,262,124 32,166,262,124

The accompanying notes are an integral part of these financial statements.

--

-(5,678,076,131) (5,678,076,131)

--

-366,207,178 366,207,178

--

---

--

-530,226,819 530,226,819

(67,123,513,119) (67,123,513,119) --

(67,123,513,119) (67,123,513,119)

-(200,928,861) (200,928,861) (200,928,861) (200,928,861)

-(200,928,861) (200,928,861) (200,928,861) (200,928,861)

(67,123,513,119) (67,123,513,119) (200,928,861) (200,928,861)

2,420,500 2,420,500 (68,299,429,949) (68,299,429,949)

(2,420,500) (2,420,500) 4,011,432,368 4,011,432,368

(2,420,500) (2,420,500) 4,011,432,368 4,011,432,368

-(36,903,377,591) (36,903,377,591)

(67,324,441,980) (67,324,441,980)


152

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Statement of Cash Flows

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint venture

Statement of Cash Flows Statement of cash flows

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture Consolidated For the year ended 31 December

Separate

financial statements

financial statements

For the year ended

Unit: Baht For the year ended 31financial Decemberstatements Separate

31 December Consolidated financial statements 2015 2015

Note Note

2014 2014

2015 2015

2014 2014

(in Baht)

Cash flows from operating activities Loss for the year

(40,897,065,619)

(4,866,832,360)

(67,123,513,119)

(346,269,694)

Adjustments for Depreciation and amortisation Finance costs Unrealised gain on exchange rate

562,340,005

2,514,243,736

442,945,967

551,031,440

2,388,566,394

3,240,188,976

2,356,947,856

1,689,684,358

(141,662,752)

Bad debts and doubtful debts expenses Provision for (reversal of) loss decline in value of inventories

(142,879,480)

(70,143,648)

34,938,353

42,109,600

34,938,353

37,202,812

(239,138,758)

464,307,264

(239,138,758)

454,150,761

26,131,059

24,453,337

18,814,447

17,675,373

(83,048,421)

237,679,931

(83,048,421)

83,048,421

3,292,889

(17,526,085)

1,957,805

Employee benefit obligations Provision for loss under onerous contracts (reversal)

(359,079,411)

Loss (gain) on disposal of property, plant and equipment Loss on impairment of property, plant and equipment

13,421,974

-

13,421,974

-

64,328,526,170

202,291 -

Loss recognised on the loss on liquidation of subsidiary

2(e)

38,036,616,825

Reversal of short-term provision

-

(7,790,000)

-

(301,942,389)

-

(7,790,000)

Share of profit of Joint venture (net of income tax)

77,495,070

Dividend income

-

Others

-

Income tax benefit

(7,855,195)

9,273,933 (25,445,720)

(225,968,176)

953,640,812

27,553,133

(565,499,709)

(30,600,000) (148,807) (421,776,013)

(83,399,990) 1,001,280 2,326,393,404

Changes in operating assets and liabilities Trade accounts receivable Other accounts receivable from related parties Inventories Other current assets

(1,338,310,060)

(1,199,329,383)

(1,165,327,495)

3,293,578,074

6,547,532,670

2,508,465,207

105,485,400

1,148,068,513

101,253,776

(1,537,424)

36,400,512

(30,294,570)

-

Other non-current assets Trade accounts payable

(599,778,505)

6,602,480,927

Long-term receivable from related party

19,741,111

913,676,880

1,678,428

1,441,901

(158,733)

(28,944)

(5,545,838,943)

(700,694,248)

(5,463,541,420)

(913,251,624)

(6,990,886)

(1,294,367,981)

1,783,767

(37,444,668)

(931,476,012)

505,122,133

(685,607,676)

Other accounts payable to related parties Other current liabilities

468,791,698

Employee benefit obligations paid

(10,163,134)

(4,180,349)

(300,215)

(300,215)

Other non-current liabilities Income tax paid

(39,424,638)

Net cash provided by operating activities

139,353,740

The accompanying notes are an integral part of these financial statements.

The accompanying notes are an integral part of these financial statements.

14

(6,563,899) 2,594,766,391

(5,204,034) (20,187,389) 1,276,791

(2,576,029) (7,902,801) 1,603,666,251


Unrealised gain on exchange rate

(141,662,752)

(359,079,411)

(142,879,480)

(70,143,648)

34,938,353

42,109,600

34,938,353

37,202,812

(239,138,758)

464,307,264

(239,138,758)

454,150,761

26,131,059

24,453,337

18,814,447

17,675,373

(83,048,421)

83,048,421

3,292,889

(17,526,085)

Bad debts and doubtful debts expenses Provision for (reversal of) loss decline in value of inventories Employee benefit obligations

Annual Report 2015 (83,048,421) 237,679,931 Sahaviriya Steel Industries Public Company Limited

ProvisionStatement for loss under of Cashonerous Flows contracts (reversal) Loss (gain) on disposal of property, plant and equipment Loss on impairment of property, plant and equipment

13,421,974

1,957,805

-

13,421,974

-

64,328,526,170

Statement of Cash Flows (continued)

153

202,291 -

Loss recognised on the loss on liquidation of subsidiary

2(e)

38,036,616,825

Reversal of short-term provision

-

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture For the year ended 31 December

(7,790,000)

-

(301,942,389)

-

(7,790,000)

Share of profit of Joint venture (net of income tax)

77,495,070

Dividend income

-

Others

Unit: Baht (30,600,000) (83,399,990) Separate- financial statements 1,001,280

-

Consolidated - financial statements 9,273,933

Income tax benefit

Note

(7,855,195) 2015

(25,445,720) 2014

(225,968,176)

953,640,812

27,553,133

(565,499,709)

-

(148,807) 2015 (421,776,013)

20142,326,393,404

Changes in operating assets and liabilities Trade accounts receivable Other accounts receivable from related parties

(1,338,310,060)

Inventories Other current assets

Sahaviriya Steelfrom Industries Public Long-term receivable related party and its Joint venture Other non-current assets

913,676,880

(599,778,505)

(1,199,329,383)

(1,165,327,495)

6,602,480,927

3,293,578,074

6,547,532,670

2,508,465,207

105,485,400

1,148,068,513

101,253,776

(1,537,424)

36,400,512

(30,294,570)

Company Limited, its Subsidiaries 19,741,111

Statement of cash flows Trade accounts payable

1,678,428

1,441,901

(5,463,541,420)

(913,251,624)

(6,990,886)

(1,294,367,981)

Other accounts payable to related parties

(158,733)

(28,944)

(5,545,838,943)

(700,694,248)

1,783,767

(37,444,668)

Other current liabilities

Consolidated 468,791,698 (931,476,012)

Separate (685,607,676) 505,122,133

Employee benefit obligations paid

financial statements (10,163,134) (4,180,349)

financial statements (5,204,034) (2,576,029)

For the year ended (300,215) (300,215)

Other non-current liabilities

31 December (6,563,899) (39,424,638)

Income tax paid Net cash provided by operating activities

Note

2015 139,353,740

2014 2,594,766,391

For -the year ended

-

31 December (7,902,801) (20,187,389) 2015 1,276,791

2014 1,603,666,251

(in Baht) Cash flows from investing activities Deposit at financial institution pledged as collateral

-

Purchases of property, plant and equipment

(44,222,194)

Purchases of intangible assets

(15,995,747)

Sales of property, plant and equipment

640,654

Machines and equipment acquired by means ofthese finance lease statements. The accompanying notes are an integral part of financial Dividend received

14

Currency translation differences Net cash used in discontinued operation

8

Net cash provided by (used in) investing activities

(21,288,350)

(103,484,986)

(22,024,372)

(8,793,567)

(13,886,294)

154,679,373 38,840,888

-

723,887,536

-

(97,402,121)

(164,964,557)

-

(42,957,963)

-

(224,541,844)

-

(740,129,104)

36,563,850

30,600,000 (21,151,530)

46,729 83,399,990

-

(33,924,561)

Cash flows from financing activities Proceeds from issuance of ordinary shares

-

Finance cost paid

(556,952,839)

(2,900,139,035)

(4,648) (525,115,274)

(1,683,088,585)

Increase in short-term loans from financial institutions

(6,556,814)

352,247,343

(18,103,982)

212,961,356

Proceeds from short-term loans from related parties

4

929,000,000

547,367,939

917,000,000

239,460,000

Repayment of short-term loans from related parties

4

(377,792,064)

(123,000,000)

(313,460,000)

(198,000,000)

Repayment of long-term loans

13

(8,870,090)

(235,523,400)

(2,870,090)

(229,523,400)

(118,014,755)

(60,008,601)

(3,437,655)

(5,846,484)

Hire purchase and finance lease payments Machines and equipment acquired by means of finance lease Repurchase of subordinated convertible debenture Dividends paid

59,156,845 (274,488)

-

(29,400,000)

(44,100,000)

Net cash provided by (used in) financing activities

(109,704,205)

(2,463,155,754)

Net increase (decrease) in cash and cash equivalents

(194,892,309)

The accompanying notes are an integral part of these financial statements.

168,174,487

(274,488) -

-

53,733,863

(1,664,037,113)

33,859,124

(94,295,423)

Effect of exchange rate changes on balance held in foreign currency Cash and cash equivalents at 1 January

351,400,815

20,128,142 163,098,186

10,677,858

104,973,281


financial statements

financial statements

For the year ended

For the year ended

31 December 2015

Note

154

2015

Statement of Cash Flows -

(21,288,350)

Statement of Cash Flows (continued) Purchases of property, plant and equipment

(44,222,194)

Purchases of intangible assets

(15,995,747)

Sales of property, plant and equipment

640,654

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture Machines and equipment acquired by means of finance lease For the year ended 31 December

(103,484,986)

(22,024,372)

(8,793,567)

(13,886,294)

154,679,373 38,840,888

723,887,536

Currency translation differences

-

(97,402,121)

Net cash provided by (used in) investing activities

Note

-

(42,957,963)

-

8

-

(740,129,104)

Dividend received

Net cash used in discontinued operation

2014

Annual Report 2015 (in Baht) Sahaviriya Steel Industries Public Company Limited

Cash flows from investing activities Deposit at financial institution pledged as collateral

31 December 2014

Consolidated financial statements (164,964,557) (224,541,844) 2015

36,563,850 2014

-

46,729

30,600,000

83,399,990

- Baht Unit: Separate- financial statements -

(21,151,530) 2015

(33,924,561) 2014

Cash flows from financing activities Proceeds from issuance of ordinary shares

-

Finance cost paid

(556,952,839)

-

(4,648)

(2,900,139,035)

(525,115,274)

(1,683,088,585)

Increase in short-term loans from financial institutions

352,247,343

(18,103,982)

212,961,356

4

929,000,000

547,367,939

917,000,000

239,460,000

Repayment of short-term loans from related parties

4

(377,792,064)

(123,000,000)

(313,460,000)

(198,000,000)

Repayment of long-term loans

13

(8,870,090)

(235,523,400)

(2,870,090)

(229,523,400)

(118,014,755)

(60,008,601)

(3,437,655)

(5,846,484)

Proceeds from short-term loans from related parties

(6,556,814)

Hire purchase and finance lease payments Machines and equipment acquired by means of finance lease

59,156,845

-

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Repurchase of subordinated convertible debenture (274,488) and its Joint venture Dividends paid

-

-

(274,488)

(29,400,000)

(44,100,000)

Net cash provided by (used in) financing activities

(109,704,205)

(2,463,155,754)

Net increase (decrease) in cash and cash equivalents

(194,892,309) Consolidated168,174,487

Statement of cash flows

financial statements

Effect of exchange rate changes on balance held in foreign currency Cash and cash equivalents at 31 December

351,400,815 31 December163,098,186 5

156,508,506 2015

-

53,733,863

(1,664,037,113)

33,859,124 Separate (94,295,423) financial statements

20,128,142 For -the year ended

Cash and cash equivalents at 1 January

-

351,400,815 2014

For -the year ended

-

10,677,858 31 December104,973,281

44,536,982 2015

10,677,858 2014

(in Baht) Significant non-cash transactions Assets acquired under hire purchase and finance lease agreements

59,156,845

43,501,497

-

3,512,945

2,413,381

1,547,999

62,751

1,426,433

Other payable for purchases of property, plant and equipment

The accompanying notes are an integral part of these financial statements.

15

The accompanying notes are an integral part of these financial statements.


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes to the Financial Statements

155

Notes to the Financial Statements

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture Note

Contents

1 General information 2 Basis of preparation of the financial statements 3 Significant accounting policies 4 Related parties 5 Cash and cash equivalents 6 Trade accounts receivable 7 Inventories 8 Discontinued operation 9 Investments in subsidiaries 10 Non-controlling interests 11 Investments in joint venture 12 Other long-term investment 13 Property, plant and equipment 14 Deferred tax 15 Interest-bearing liabilities 16 Trade accounts payable 17 Other current liabilities 18 Employee benefit obligations

Page

Note

156 156

19 Subordinated convertible debenture and convertible rights 20 Share capital 21 Reserves 22 Segment reporting 23 Selling expenses 24 Administrative expenses 25 Employee benefit expenses 26 Expenses by nature 27 Finance costs 28 Income tax expense 29 Promotional privileges 30 Basic/diluted earning (loss) per share 31 Financial instruments 32 Commitments with non-related parties 33 Contingent liabilities and contingent assets 34 Thai Financial Reporting Standards (TFRS) not yet adopted 35 Reclassification of accounts

164 182 197 197 199 200 203 205 207 212 213 223 227 233 234 234

Contents

Page

238 240 241 242 245 246 247 248 249 249 252 255 256 265 266 268 271


156

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes to the Financial Statements

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture

Notes to the Financial Statements Notes to the financial statements

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture Theseform notes anpart integral of the financial statements. These notes an form integral of thepart financial statements. The financial statements issued for Thai statutory and regulatory reporting purposes are prepared in the Thai language. The financial issued forhave Thai statutory and regulatory reportingstatutory purposes are prepared in These English languagestatements financial statements been prepared from the Thai language financial statements, the Thai language. These English language financial statements have been prepared from the Thai and were approved and authorised for issue by the Board of Directors on 15 February 2016.

language statutory financial statements, and were approved and authorised for issue by the Board of Directors on 15 February 2016.

1

General information Sahaviriya Steel Industries Public Company Limited (the “Company”), is incorporated in Thailand and has its registered office at 28/1 Prapawit Building, 2nd-3rd Floor, Surasak Road, Kwang Silom, Khet Bangrak, Bangkok, Thailand and its plant located at 9, Moo 7, Tambon Mae Rumphueng, Amphur Bang Saphan, Prachuabkirikhan, Thailand. The Company, it subsidiaries and its joint venture are hereinafter collectively referred to as “the Group”. The Company was listed on the Stock Exchange of Thailand in September 1994. The Company’s major shareholders during the financial year were Sahaviriya Group Corporation Limited (14.69% shareholding, incorporated in Thailand), Vanoment Holding AG (19.71% shareholding, incorporated in Switzerland) and Sahaviriya Inter Steel Holdings Co., Ltd. (5.79% shareholding, incorporated in Thailand). The principal businesses of the Company are manufacturing and distributing of hot rolled coils. Details of the Company’s subsidiaries and joint venture as at 31 December 2015 and 2014 are given in Notes 9 and 11.

2

Basis of preparation of the financial statements

(a)

Statement of compliance The financial statements are prepared in accordance with Thai Financial Reporting Standards (TFRS); guidelines promulgated by the Federation of Accounting Professions (“FAP”); and applicable rules and regulations of the Thai Securities and Exchange Commission. The FAP has issued new and revised TFRS effective for annual accounting periods beginning on or after 1 January 2015. The initial application of these new and revised TFRS has resulted in changes in certain of the Group’s accounting policies. These changes have no material effect on the financial statements. In addition to the above new and revised TFRS, the FAP has issued a number of other new and revised TFRS which are effective for financial statements beginning on or after 1 January 2016 and have not been adopted in the preparation of these financial statements. Those new and revised TFRS that are relevant to the Group’s operations are disclosed in Note 35.

(b)

Basic of measurement The financial statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date.

18


The FAP has issued new and revised TFRS effective for annual accounting periods beginning on or after 1 January 2015. The initial application of these new and revised TFRS has resulted in changes in certain of the Group’s accounting policies. These changes have no material effect on the financial statements. Annual Report 2015 Notes to the Financial Statements 157 Sahaviriya Steel Industries Public Company Limited In addition to the above new and revised TFRS, the FAP has issued a number of other new and revised TFRS which are effective for financial statements beginning on or after 1 January 2016 and have not been adopted in the preparation of these financial statements. Those new and revised TFRS that are relevant to the Group’s operations are disclosed in Note 35. (b)

Basic of measurement Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Venture TheJoint financial statements have been prepared on the historical cost basis except for and Venture Notesits to Joint thewhich financial statements items, are measured on an alternative basis on each reporting date.

the following

Notes to the financial statements Items Items Property, plant and equipment Property, plant and equipment Net defined benefit liability Net defined benefit liability (c) (c)

(d) (d)

18

Measurement bases Measurement bases Fair value Fair value Present value of the defined benefit Present value of theasdefined benefit obligation, limited explained in Note 3(o) obligation, limited as explained in Note 3(o)

Presentation currency Presentation currency The financial statements are prepared and presented in Thai Baht which is the Company’s functional The financial are preparedpresented and presented in Thai is the Company’s functional currency. All statements financial information in Thai BahtBaht has which been rounded in the notes to the currency. All financial information presented in Thai Baht has been rounded in the notes to the financial statements to the nearest thousand unless otherwise stated. financial statements to the nearest thousand unless otherwise stated. Use of estimates and judgements Use of estimates and judgements The preparation of financial statements in conformity with TFRS requires management to make The preparation of financial statements conformity with TFRS requiresand management to make judgements, estimates and assumptions thatinaffect the application of policies reported amounts of judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting Estimates andrecognised underlyingprospectively. assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are estimates are recognised prospectively. (i) Assumptions and estimation uncertainties (i) Assumptions and estimation uncertainties Information about significant areas of estimation uncertainties that have a significant risk of Information significant areas of uncertainties have a significant risk of resulting in about a material adjustments to estimation the amounts recognised that in the financial statements is resulting in a material adjustments to the amounts recognised in the financial statements is included in the following notes: included in the following notes: Note 2(e) Going concerns Note 2(e) concerns Notes 9, 11, and 13 Going Calculation of recoverable amount and significant assumption Notes 9, 11, and 13 Calculation recoverable amount and significant Note 28 Current and of deferred taxation and utilisation of taxassumption losses Note 28 Current and deferred taxation and utilisation Note 18 Measurement of defined benefit obligations of tax losses Note 18 Measurement of defined benefit obligations Note 31 Valuation of financial instruments Note 31 Valuation of financial instruments Measurement of fair values Measurement of fair values A number of the Group’s accounting policies and disclosures require the measurement of fair A number thefinancial Group’sand accounting policies andand disclosures values, for of both non-financial assets liabilities.require the measurement of fair values, for both financial and non-financial assets and liabilities. The Group has an established control framework with respect to the measurement of fair values. The hasaan established framework with respect to measurement of fair values. This Group includes valuation teamcontrol that has overall responsibility forthe overseeing all significant fair This a valuation team Level that has overall responsibility overseeing all significant fair valueincludes measurements, including 3 fair values, and reports for directly to the CFO. value measurements, including Level 3 fair values, and reports directly to the CFO. The valuation team regularly reviews significant unobservable inputs and valuation adjustments. The valuation regularlysuch reviews significant unobservable inputs andisvaluation adjustments. If third party team information, as broker quotes or pricing services, used to measure fair If third then partythe information, suchassesses as broker or obtained pricing services, usedparties to measure fair values, valuation team thequotes evidence from theisthird to support values, then thethat valuation team assesses the requirements evidence obtained fromincluding the thirdthe parties the conclusion such valuations meet the of TFRS, levelto in support the fair the conclusion such valuations meet the requirements of TFRS, including the level in the fair value hierarchythat in which such valuations should be classified. value hierarchy in which such valuations should be classified. Significant valuation issues are reported to the Group Audit Committee. Significant valuation issues are reported to the Group Audit Committee.


Information about significant areas of estimation uncertainties that have a significant risk of resulting in a material adjustments to the amounts recognised in the financial statements is included in the following notes: 158

Annual Report 2015

to the Financial Statements NoteNotes2(e) Going concerns Sahaviriya Steel Industries Public Company Limited Notes 9, 11, and 13 Calculation of recoverable amount and significant assumption Note 28 Current and deferred taxation and utilisation of tax losses Note 18 Measurement of defined benefit obligations Note 31 Valuation of financial instruments Measurement of fair values A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Group has an established control framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the CFO.

The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support Sahaviriya Steel Industries Public Company Limited, its Subsidiaries the conclusion that such valuations meet the requirements of TFRS, including the level in the fair and its Joint value Venture hierarchy in which such valuations should be classified.

Notes to the financial statements

Significant valuation issues are reported to the Group Audit Committee.

When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:   

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. 19 included in Level 1 that are observable for the asset Level 2: inputs other than quoted prices or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirely in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. Further information about the assumptions made in measuring fair values is included in the following notes:   (e)

Note 13 – property, plant and equipment. Note 31 – financial instruments

Current operations Liquidation and Deconsolidation of SSI UK and Financial statements of SSI UK Sahaviriya Steel Industries UK Limited (“SSI UK”) is an integrated iron and steel slab producer. As a result of the recent poor operating results and decrease in global steel price, the operating environment of SSI UK has become more difficult. On 18 September 2015 SSI UK suspended production. A petition for winding up SSI UK was lodged and the application was granted on 2 October 2015. A liquidator was appointed and took control of SSI UK. Since the appointment of the liquidator on 2 October 2015, the Company no longer controls the business or operations of SSI UK and, therefore, the assets and liabilities of SSI UK have been derecognized in the consolidated financial statements and replaced with the recognition of the investment in SSI UK, written down to its recoverable amount, which is nil. The results of SSI UK recognised in the consolidated statement of income until the date that the Company lost control of SSI UK, have been reclassified and presented as results from discontinued operation together with the net balance resulting from the derecognition of the assets and liabilities of SSI UK.


Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).  Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). Annual Report 2015 Notes to the Financial Statements Sahaviriya Steel Industries Public Company Limited  

If the inputs used to measure the fair value of an asset or liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirely in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. Further information about the assumptions made in measuring fair values is included in the following notes:   (e)

Note 13 – property, plant and equipment. Note 31 – financial instruments

Current operations Liquidation and Deconsolidation of SSI UK and Financial statements of SSI UK Sahaviriya Steel Industries UK Limited (“SSI UK”) is an integrated iron and steel slab producer. As a result of the recent poor operating results and decrease in global steel price, the operating environment of SSI UK has become more difficult. On 18 September 2015 SSI UK suspended production. A petition for winding up SSI UK was lodged and the application was granted on 2 October 2015. A liquidator was appointed and took control of SSI UK. Since the appointment of the liquidator on 2 October 2015, the Company no longer controls the business or operations of SSI UK and, therefore, the assets and liabilities of SSI UK have been derecognized in the consolidated financial statements and replaced with the recognition of the investment in SSI UK, written down to its recoverable amount, which is nil. The results of SSI UK recognised in the consolidated statement of income until the date that the Company lost control of SSI UK, have been reclassified and presented as results from discontinued operation together with the net balance resulting from the derecognition of the assets and liabilities of SSI UK. The commencement of liquidation of SSI UK has resulted in its assets being frozen; access to its manufacturing facilities, in which most of its accounting records and related supporting documents are located, blocked; and key personnel in financial reporting being dismissed. Consequently, management has prepared the financial statements of SSI UK for the presentation of discontinued operations in the consolidated statement of income of the Group based on SSI UK's management accounts and related reports made up to 31 August 2015 and estimates for the remaining period until 2 October 2015, using all relevant information available to the Group to date. Based on the unaudited management accounts of SSI UK, the results of SSI UK for the period from 1 January 2015 to 2 October 2015, the date when SSI TH ceased to have control, included and presented as discontinued operations are significant to the Group. The operating results of the coke manufacturing and steel making plants for the period from 1 January 2015 to 2 October 2015 are disclosed in note 8 “Discontinued operation” to the financial statements. 20

159


160

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes to the Financial Statements

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture and Venture Notesits to Joint the financial statements Notes to the financial statements

Impact on the consolidated financial statements: Impact on the consolidated financial statements: At 2 October 2015, assets and liabilities of SSI UK that were derecognised comprised the following: At 2 October 2015, assets and liabilities of SSI UK that were derecognised comprised the following: Unit: Thousand Baht

Note

Carrying Carrying value value

Adjustment Adjustment

Translation Translation difference difference

Total Total

Net Net

Current assets (trade receivables, Current assetsand (trade receivables, inventories others) inventories and others) Investments in joint-venture Investments in joint-venture Property, plant, and equipment Property, plant, Intangible assetsand equipment Intangibletax assets Deferred assets Deferred tax assets Assets derecognised Assets derecognised

5,198,931 11 5,198,931 804,639 11 804,639 13 35,143,915 13 35,143,915 79,291 79,291 14 1,698,610 14 42,925,386 1,698,610 42,925,386

(4,820,714) (4,820,714) (746,102) (746,102) (32,587,227) (32,587,227) (73,522) (73,522) (1,575,037) (1,575,037) (39,802,602) (39,802,602)

(378,217) (378,217) (58,537) (58,537) (2,556,688) (2,556,688) (5,769) (5,769) (123,573) (123,573) (3,122,784) (3,122,784)

(5,198,931) (5,198,931) (804,639) (804,639) (35,143,915) (35,143,915) (79,291) (79,291) (1,698,610) (1,698,610) (42,925,386) (42,925,386)

------

Bank overdrafts and short-term Bank overdrafts and short-term loans from financial institutions loans from financial Long-term loans from institutions financial Long-term loans from financial institutions institutions

15 15 15 15

10,865,638 10,865,638 17,714,116 17,714,116 28,579,754 28,579,754 Current liabilities (trade payables Current liabilities (trade payables and others) 12,613,225 and liabilities others) 12,613,225 Other 990,856 Other liabilities 990,856 Deferred tax liabilities 14 1,698,610 Deferred tax liabilities 14 1,698,610 Environmental liabilities and Environmental liabilities and others 662,630 others 662,630 Liabilities derecognised 44,545,075 Liabilities derecognised 44,545,075 Net adjustment items before Net adjustment items before provisions provisions Less provision made for loss on Less provisiongiven madebyfor guarantees theloss on guarantees given by the Company in the Company’s Company in the Company’s separate financial statement separate financial statement Loan SSI UK -Loan UK Bank SSI guarantee Bank guarantee Provision for loss on pledged Provision losspayable on pledged asset to afor trade of SSI asset to a trade payable of SSI UK UK Others Others Loss on liquidation of Loss on liquidation of subsidiary -consolidated subsidiary -consolidated financial statements included financial statements included and presented as discontinued and presented as discontinued operations operations

(10,075,173) (10,075,173) (16,425,430) (16,425,430) (26,500,603) (26,500,603) (11,252,095) (11,252,095) (929,048) (929,048) (1,575,037) (1,575,037) (614,424) (614,424) (40,871,207) (40,871,207)

(790,465) (790,465) (1,288,686) (1,288,686) (2,079,151) (2,079,151) (1,361,130) (1,361,130) (61,808) (61,808) (123,573) (123,573) (48,206) (48,206) (3,673,868) (3,673,868)

(10,865,638) (10,865,638) (17,714,116) (17,714,116) (28,579,754) (28,579,754) (12,613,225) (12,613,225) (990,856) (990,856) (1,698,610) (1,698,610) (662,630) (662,630) (44,545,075) (44,545,075)

--

Borrowings : Borrowings :

21 21

1,068,605 1,068,605

(29,976,133) (29,976,133) (57,983) (57,983) (499,637) (499,637) 296,199 296,199

(29,168,949) (29,168,949)

---


Current assets (trade receivables, inventories and others) 5,198,931 (4,820,714) (378,217) (5,198,931) Sahaviriya Industries Public Company Limited, Investments Steel in joint-venture 11 804,639 (746,102) its Subsidiaries (58,537) (804,639) and its Joint Property, plant,Venture and equipment 13 35,143,915 (32,587,227) (2,556,688) (35,143,915) Annual Report 2015 Notes toNotes thetoassets financial statements Intangible 79,291 (73,522) (5,769) (79,291) - 161 the Financial Statements Sahaviriya Steel Industries Public Company Limited Deferred tax assets 14 1,698,610 (1,575,037) (123,573) (1,698,610) Assets derecognised 42,925,386 (39,802,602) (3,122,784) (42,925,386) Impact on the consolidated financial statements: Borrowings : At 2 October 2015, assets and liabilities of SSI UK that were derecognised comprised the following: Bank overdrafts and short-term Unit: Thousand Baht loans from financial institutions 15 10,865,638 (10,075,173) (790,465) (10,865,638) Carrying Adjustment Translation Total Net Long-term loans from financial value difference Note institutions 15 17,714,116 (16,425,430) (1,288,686) (17,714,116) 28,579,754 (26,500,603) (2,079,151) (28,579,754) Current assets (trade receivables, Current liabilities (trade payables inventories and others) 5,198,931 (4,820,714) (378,217) (5,198,931) and others)in joint-venture (11,252,095) (1,361,130) (12,613,225) Investments 11 12,613,225 804,639 (746,102) (58,537) (804,639) Other liabilities 990,856 (929,048) (61,808) (990,856) Property, plant, and equipment 13 35,143,915 (32,587,227) (2,556,688) (35,143,915) -Deferred tax liabilities 14 1,698,610 (1,575,037) (123,573) (1,698,610) Intangible assets 79,291 (73,522) (5,769) (79,291) -Environmental liabilities and Deferred tax assets 14 1,698,610 (1,575,037) (123,573) (1,698,610) others 662,630 (614,424) (48,206) (662,630) Assets derecognised 42,925,386 (39,802,602) (3,122,784) (42,925,386) -Liabilities derecognised 44,545,075 (40,871,207) (3,673,868) (44,545,075) Borrowings : Net adjustment items before provisions Less for loss on Bankprovision overdraftsmade and short-term guarantees given by institutions the loans from financial 15 10,865,638 Companyloans in thefrom Company’s Long-term financial separate financial statement institutions 15 17,714,116 Loan SSI UK 28,579,754 Bank Current liabilities (tradeguarantee payables Provision for loss on pledged and others) 12,613,225 asset to a trade payable of SSI Other liabilities 990,856 UK Deferred tax liabilities 14 1,698,610 Others Environmental liabilities and Loss on liquidation of others 662,630 subsidiary -consolidated Liabilities derecognised 44,545,075 financial statements included Net items before andadjustment presented as discontinued provisions operations Less provision made for loss on guarantees given by the Company in the Company’s separate financial statement Loan SSI UK Bank guarantee Provision for loss on pledged 21 asset to a trade payable of SSI UK Others Loss on liquidation of subsidiary -consolidated financial statements included and presented as discontinued operations

21

1,068,605 (10,075,173)

(790,465)

(10,865,638)

-

(16,425,430) (29,976,133) (26,500,603) (57,983) (11,252,095) (929,048) (499,637) (1,575,037) 296,199 (614,424) (40,871,207)

(1,288,686) (2,079,151)

(17,714,116) (28,579,754)

-

(1,361,130) (61,808) (123,573)

(12,613,225) (990,856) (1,698,610)

-

(48,206) (3,673,868)

(662,630) (44,545,075)

-

1,068,605 (29,168,949)

(29,976,133) (57,983) (499,637) 296,199

(29,168,949)


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes to the Financial Statements

Sahaviriya SahaviriyaSteel SteelIndustries IndustriesPublic PublicCompany CompanyLimited, Limited,its itsSubsidiaries Subsidiaries and and its itsJoint JointSteel Venture Venture Sahaviriya Industries Public Company Limited, its Subsidiaries Notes Notes to to the the financial financial statements statements and its Joint Venture

162

Notes to the financial statements

Impact Impacton onthe theseparate separatefinancial financialstatements: statements: Impact on the separate financial statements: The TheCompany Companyhas hasreviewed reviewedthe thecarrying carryingamount amountofofitsitsinterests interestsininSSI SSIUK UKininthe thecontext contextofofthe the liquidation liquidationofofSSI SSIUK UKand andconcluded concludedthat thatisisunlikely unlikelythat thatthe theCompany Companywill willreceive receiveany anyreturn returnupon upon The Company has reviewed the carrying amount of its interests in SSI UK in the context of the the thecompletion completionofofthe theliquidation. liquidation.Therefore Thereforefull fullprovision provisionfor forthese theseinterests interestshas hasbeen beenmade madeininthe the liquidation of SSI UK and concluded that is unlikely that the Company will receive any return upon Company’s Company’sseparate separatefinancial financialstatements statementsasasfollows: follows: the completion of the liquidation. Therefore full provision for these interests has been made in the Company’s separate financial statements as follows: Investments InvestmentsininSSI SSIUK UK Baht Baht 27,482 27,482million million Amounts Amountsdue duefrom fromSSI SSIUK UK(trade (tradereceivable receivableand andothers) others) Baht Baht 2,796 2,796million million Investments in SSI UK Baht 27,482 million Advance Advancepayment paymentfor forgoods goods Baht Baht 3,162 3,162million million Amounts due from SSI UK (trade receivable and others) Baht 2,796 million Provision Provisionfor forloss losson ongoods goodsinintransit transit Baht Baht 355 355million million Advance payment for goods Baht 3,162 million Total Total Baht Baht33,795 33,795million million Provision for loss on goods in transit Baht 355 million Provision Provisionfor forloss losson onguarantee guaranteegiven givenby bythe theCompany Company Total Baht 33,795 million totobanks banksininrespect respectofofSSI SSIUK UK Provision for loss on guarantee given by the Company Loan Loan Baht Baht 29,976 29,976million million to banks in respect of SSI UK Bank Bankguarantee guarantee Baht Baht 58 58million million Loan Baht 29,976 million Provision Provisionfor forloss losson onpledge pledgeofofthe thecompany’s company’sasset asset Bank guarantee Baht 58 million totoa atrade tradecreditor creditorofofSSI SSIUK UK Baht Baht 500 500million million Provision for loss on pledge of the company’s asset Total Total Baht Baht30,534 30,534million million to a trade creditor of SSI UK Baht 500 million Loss Losson onliquidation liquidationofofsubsidiarysubsidiaryTotal Baht 30,534 million separate separatefinancial financialstatements statements Baht Baht64,329 64,329million million Loss on liquidation of subsidiaryseparate financial statements Baht 64,329 million The TheCompany Companyhas haspresented presentedthis thisasasloss losson onliquidation liquidationofofsubsidiary subsidiaryininthe theseparate separatestatements statementsofof income incomefor foryear yearended ended31 31December December2015. 2015.Following Followingthe theliquidation liquidationofofSSI SSIUK, UK,net netinterests interestsand and The Company has presented this as loss on liquidation of subsidiary in the separate statements of carrying carryingvalue valueofofinvestments investmentsininSSI SSIUK UKhas hasbeen beentransferred transferredtotoassets assetsheld heldfor fordisposal disposalininthe theseparate separate income for year ended 31 December 2015. Following the liquidation of SSI UK, net interests and financial financialstatements statementsatat31 31December December2015. 2015.Details Detailsare areasasfollows: follows: carrying value of investments in SSI UK has been transferred to assets held for disposal in the separate financial statements at 31 December 2015. Details are as follows: Ownership Ownership Cost Cost interest interest method method Impairment Impairment At Atcost cost- -net net Ownership Cost (%) (%) (in (inthousand thousandBaht) Baht) interest method Impairment At cost - net Investments InvestmentsininSahaviriya SahaviriyaSteel Steel (%) (in thousand Baht) Industries IndustriesUK UKLimited Limited 100 100 27,481,792 27,481,792 27,481,792 27,481,792 -Investments in Sahaviriya Steel Industries UK Limited 100 27,481,792 27,481,792 Going Goingconcern concern Going concern During Duringthe theyear yearended ended31 31December December2015, 2015,the theGroup Groupincurred incurreda anet netloss lossofofBaht Baht40,897 40,897million million(includes (includes losses lossesfrom fromthe thediscontinuation discontinuationofofSSI SSIUK’s UK’soperation operationofofBaht Baht38,037 38,037million) million)and andasasatat31 31December December During the year ended 31 December 2015, the Group incurred a net loss of Baht 40,897 million (includes 2015 2015the theGroup Grouphad hadcumulative cumulativedeficit deficitofofBaht Baht68,526 68,526million millionand anditsitscurrent currentliabilities liabilitiesexceeded exceededitsits losses from the discontinuation of SSI UK’s operation of Baht 38,037 million) and as at 31 December current currentassets assetsby byBaht Baht54,496 54,496million. million.As Asatatand andfor forthe thesame sameperiod, period,the theCompany Companyincurred incurreda anet netloss lossofof 2015 the Group had cumulative deficit of Baht 68,526 million and its current liabilities exceeded its Baht Baht 67,124 67,124 million million (includes (includes losses losses from from the the liquidation liquidation ofof SSI SSI UK UK ofof Baht Baht 64,329 64,329 million); million); current assets by Baht 54,496 million. As at and for the same period, the Company incurred a net loss of had had cumulative cumulative deficit deficit ofof Baht Baht 68,299 68,299 million; million; and and current current liabilities liabilities exceeded exceeded current current assets assets by by Baht 67,124 million (includes losses from the liquidation of SSI UK of Baht 64,329 million); Baht Baht54,325 54,325million. million.Pursuant Pursuanttotothe thediscontinuation discontinuationofofSSI SSIUK’s UK’soperations operationsthe thethree threemajor majorlenders lenders had cumulative deficit of Baht 68,299 million; and current liabilities exceeded current assets by demanded demandedimmediate immediatepayment paymentofofthe theremaining remainingbalance balanceofofa aloan loancarried carriedatatUSD USD815 815million million(equivalent (equivalent Baht 54,325 million. Pursuant to the discontinuation of SSI UK’s operations the three major lenders totoBaht Baht30,034 30,034million) million)asasatat31 31December December2015 2015which whichwas wasalso alsoprimarily primarilysecured securedby bySSI SSIUK’s UK’s demanded immediate payment of the remaining balance of a loan carried at USD 815 million (equivalent property, property,plant plantand andequipment equipmentand andguaranteed guaranteedby bythe theCompany. Company.The Thethree threemajor majorlenders lendersalso alsodemanded demanded to Baht 30,034 million) as at 31 December 2015 which was also primarily secured by SSI UK’s the theCompany Companytotobeberesponsible responsiblefor forthis thisobligation obligationasasguarantor. guarantor.InInaddition, addition,on on11October October2015 2015the thethree three property, plant and equipment and guaranteed by the Company. The three major lenders also demanded major majorlenders lendersdemanded demandedimmediate immediatepayment paymentofofthe theremaining remainingbalance balanceofofthe theCompany’s Company’sloan loancarried carriedatat the Company to be responsible for this obligation as guarantor. In addition, on 1 October 2015 the three Baht Baht9,840 9,840million millionasasatat31 31December December2015. 2015.InInview viewofofthis thissituation, situation,on on11October October2015 2015the theBoard Boardofof major lenders demanded immediate payment of the remaining balance of the Company’s loan carried at Directors Directors ofof the the Company Company approved approved for for the the Company Company toto submit submit anan application application for for Business Business Baht 9,840 million as at 31 December 2015. In view of this situation, on 1 October 2015 the Board of Rehabilitation Rehabilitationtotothe thecourt. court.Such Suchcircumstances circumstancesindicate indicatethe theexistence existenceofofa amaterial materialuncertainty uncertaintywhich which Directors of the Company approved for the Company to submit an application for Business may maycast castsignificant significantdoubt doubtabout aboutthe theGroup's Group'sand andthe theCompany’s Company’sability abilitytotocontinue continueasasgoing goingconcerns. concerns. Rehabilitation to the court. Such circumstances indicate the existence of a material uncertainty which may cast significant doubt about the Group's and the Company’s ability to continue as going concerns. 22 22 22


The Company has presented this as loss on liquidation of subsidiary in the separate statements of income for year ended 31 December 2015. Following the liquidation of SSI UK, net interests and carrying value of investments in SSI UK has been transferred to assets held for disposal in the separate financial statements at 31 December 2015. Details are as follows:

Notes to the Financial Statements Investments in Sahaviriya Steel Industries UK Limited

Ownership interest (%) 100

Annual Report 2015 Cost Sahaviriya Steel Industries Public Company Limited

method

27,481,792

Impairment At cost - net (in thousand Baht) 27,481,792

-

Going concern During the year ended 31 December 2015, the Group incurred a net loss of Baht 40,897 million (includes losses from the discontinuation of SSI UK’s operation of Baht 38,037 million) and as at 31 December 2015 the Group had cumulative deficit of Baht 68,526 million and its current liabilities exceeded its current assets by Baht 54,496 million. As at and for the same period, the Company incurred a net loss of Baht 67,124 million (includes losses from the liquidation of SSI UK of Baht 64,329 million); had cumulative deficit of Baht 68,299 million; and current liabilities exceeded current assets by Baht 54,325 million. Pursuant to the discontinuation of SSI UK’s operations the three major lenders demanded immediate payment of the remaining balance of a loan carried at USD 815 million (equivalent to Baht 30,034 million) as at 31 December 2015 which was also primarily secured by SSI UK’s property, plant and equipment and guaranteed by the Company. The three major lenders also demanded the Company to be responsible for this obligation as guarantor. In addition, on 1 October 2015 the three major lenders immediate payment of the remaining balance the Company’s loan carried at Sahaviriya Steeldemanded Industries Public Company Limited, itsofSubsidiaries Baht 9,840 million as at 31 December 2015. In view of this situation, on 1 October 2015 the Board of and its JointofVenture Directors the Company approved for the Company to submit an application for Business NotesRehabilitation to the financial statements to the court. Such circumstances indicate the existence of a material uncertainty which may cast significant doubt about the Group's and the Company’s ability to continue as going concerns. Despite the above circumstances, the Group and the Company should be able to generate sufficient 22 cash flows from future operations to cover operating costs and to meet financing commitments. This is based on the discontinuation of SSI UK’s operation, which had been incurring losses; the commencement and implementation of the business rehabilitation plan; and the support of the major lenders. The consolidated and separate financial statements have been prepared on the going concern basis on the assumption that the business rehabilitation will be successful and such further capital and credit facilities will be secured to the extent that the Group’s and the Company’s operations require. The validity of this assumption is, however, dependent on the success of the business rehabilitation plan, which had not commenced at the date of the report, including the measures taken to improve profitability and cash flows; the successful outcome of the Group's negotiations with its major lenders in debt restructuring; and the availability of financing from other sources to meet funding requirements. As discussed in Note 15, in July 2015 the Board of Directors of the Company approved to borrow an interest-free short-term loan of Baht 1,700 million from a director to improve the Group’s liquidity of which approximately Baht 637 million had been borrowed as at 31 December 2015. As at 31 December 2015, the Group had Baht 35 million of undrawn credit facilities. No other adjustments to the classification or carrying value of assets and liabilities have been made in the consolidated and separate financial statements should the Group and the Company not be able to continue as going concerns. If the Group and the Company were unable to continue as going concerns, the realisable value of assets may be significantly less than their current carrying value and additional liabilities may be incurred. Submission of a petition for Business Rehabilitation to the Central Bankruptcy Court On 1 October 2015, the Board of Directors of the Company approved the Company to submit a petition for Business Rehabilitation to the Central Bankruptcy Court. The Court scheduled the inquiry on the petition on 21 December 2015 and the next inquiry date will be on 17 February 2016. Presently, the Company is waiting for the Court’s examination and consideration to order the Company for Business Rehabilitation.

3

Significant accounting policies The accounting policies set out below have been applied consistently to all periods presented in these financial statements.

(a)

Basis of consolidation

163


164

credit facilities will be secured to the extent that the Group’s and the Company’s operations require. The validity of this assumption is, however, dependent on the success of the business rehabilitation plan, which had not commenced at the date of the report, including the measures taken to improve profitability and cash flows; the successful outcome of the Group's negotiations with its major lenders Report 2015 in debt and the availability of financing Annual from other sources to meet funding Notes torestructuring; the Financial Statements Sahaviriya Steel Industries Public Company Limited requirements. As discussed in Note 15, in July 2015 the Board of Directors of the Company approved to borrow an interest-free short-term loan of Baht 1,700 million from a director to improve the Group’s liquidity of which approximately Baht 637 million had been borrowed as at 31 December 2015. As at 31 December 2015, the Group had Baht 35 million of undrawn credit facilities. No other adjustments to the classification or carrying value of assets and liabilities have been made in the consolidated and separate financial statements should the Group and the Company not be able to continue as going concerns. If the Group and the Company were unable to continue as going concerns, the realisable value of assets may be significantly less than their current carrying value and additional liabilities may be incurred. Submission of a petition for Business Rehabilitation to the Central Bankruptcy Court On 1 October 2015, the Board of Directors of the Company approved the Company to submit a petition for Business Rehabilitation to the Central Bankruptcy Court. The Court scheduled the inquiry on the petition on 21 December 2015 and the next inquiry date will be on 17 February 2016. Presently, the Company is waiting for the Court’s examination and consideration to order the Company for Business Rehabilitation.

3

Significant accounting policies The accounting policies set out below have been applied consistently to all periods presented in these financial statements.

(a)

Basis of consolidation The consolidated financial statements relate to the Company, its subsidiaries and joint venture (together referred to as the “Group”) and the Group’s interests in joint venture. Business combinations The Group applies the acquisition method for all business combinations when control is transferred to the Group other than those with entities under common control. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that currently are exercisable. The acquisition date is the date on which control is transferred to the acquirer. Judgement is applied in determining the acquisition date and determining whether control is transferred from one party to another. 23


Notes to the Financial Statements

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture Notes to the financial statements

Goodwill is measured as the fair value of the consideration transferred including the recognised amount of any non-controlling interest in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed, all measured as of the acquisition date. Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Group to the previous owners of the acquiree, and equity interests issued by the Group. Consideration transferred also includes the fair value of any contingent consideration and share-based payment awards of the acquiree that are replaced mandatorily in the business combination. If a business combination results in the termination of pre-existing relationships between the Group and the acquiree, then the lower of the termination amount, as contained in the agreement, and the value of the off-market element is deducted from the consideration transferred and recognised in other expenses. When share-based payment awards exchanged (replacement awards) for awards held by the acquiree’s employees (acquiree’s awards) relate to past services, then a part of the market-based measure of the awards replaced is included in the consideration transferred. If they require future services, then the difference between the amount included in consideration transferred and the market-based measure of the replacement awards is treated as post-combination compensation cost. A contingent liability of the acquiree is assumed in a business combination only if such a liability represents a present obligation and arises from a past event, and its fair value can be measured reliably. The Group measures any non-controlling interest (NCI) at its proportionate interest in the identifiable net assets of the acquiree. Transaction costs that the Group incurs in connection with a business combination, such as legal fees, and other professional and consulting fees are expensed as incurred. Subsidiaries Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Loss of control When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related non-controlling interest and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost. Interests in equity–accounted investees The Group’s interests in equity-accounted investees comprise interests in a joint venture. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities. Interests in joint ventures are accounted for using the equity method. They are recognised initially at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of equity– accounted investees, until the date on which significant influence or joint control ceases. 24

165


rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. 166

Loss of control Notes to the Financial Statements

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related non-controlling interest and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost. Interests in equity–accounted investees The Group’s interests in equity-accounted investees comprise interests in a joint venture. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.

Interests in jointIndustries ventures are accounted for using the Limited, equity method. They are recognised initially at Sahaviriya Steel Public Company its Subsidiaries cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial and its Joint Venture

include statements the Group’s share of the profit or loss and other comprehensive income of equity– Notesstatements to the financial accounted investees, until the date on which significant influence or joint control ceases. 24

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with joint venture are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. (b)

Foreign currencies Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the exchange rates of the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency using the foreign exchange rates ruling at that dates of the transactions. Foreign exchange differences arising on retranslation are recognised in profit or loss. Non-monetary assets and liabilities measured at cost in foreign currencies are translated to the functional currency at foreign exchange rates ruling at the dates of the transactions. Foreign operations The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to Thai Baht at the foreign exchange rates ruling at the reporting date. Goodwill and fair value adjustments arising on the acquisition of foreign operations are stated at exchange rates ruling on transaction dates. The revenues and expenses of foreign operations are translated to Thai Baht at rates approximating the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences are recognised in other comprehensive income and accumulated in the translation reserve, except to extent that the translation difference is allocated to non-controlling interest. When a foreign operation is disposed of in its entirety or partially such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. If the Group disposes of part of its interest in a subsidiary but retains control, then the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of an associate or joint venture while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss. When the settlement of a monetary item receivable from or payable to a foreign operation is neither


Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the exchange rates of the dates of the transactions. Annual Report 2015 Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to Notes to the Financial Statements 167 Sahaviriya Steel Industries Public Company the functional currency using the foreign exchange rates ruling at Limited that dates of the transactions. Foreign exchange differences arising on retranslation are recognised in profit or loss.

Non-monetary assets and liabilities measured at cost in foreign currencies are translated to the functional currency at foreign exchange rates ruling at the dates of the transactions. Foreign operations The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to Thai Baht at the foreign exchange rates ruling at the reporting date. Goodwill and fair value adjustments arising on the acquisition of foreign operations are stated at exchange rates ruling on transaction dates. The revenues and expenses of foreign operations are translated to Thai Baht at rates approximating the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences are recognised in other comprehensive income and accumulated in the translation reserve, except to extent that the translation difference is allocated to non-controlling interest. When a foreign operation is disposed of in its entirety or partially such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. If the Group disposes of part of its interest in a subsidiary but retains control, then the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of an associate or joint venture while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss. When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and presented in the foreign currency translation reserve in equity until disposal of the investment.

25


168

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes to the Financial Statements

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture Notes to the financial statements (c)

Derivative financial instruments Derivative financial instruments are used to manage exposure to foreign exchange, interest rate and commodity price risks arising from operational, financing and investment activities. Derivative financial instruments are not used for trading purposes. However, derivatives that do not qualify for hedge accounting are accounted for as trading instruments. Hedge of future foreign currency transactions Gains and losses from forward exchange contracts and currency swaps used to hedge anticipated future currency transactions are deferred until the forecasted transaction occurs. Where the hedged item is a recognised asset or liability, it is translated at the contracted forward rates. Foreign currency assets and liabilities hedged by forward exchange contracts are translated to Thai Baht at the contracted forward exchange rates. Hedge of interest rates Interest differentials under swap arrangements are accrued and recorded as adjustments to the interest expense relating to the hedged loans. For interest rate forward contracts, the amounts received or paid on cash settlements, representing the gain or loss, are deferred and recognised over the life of the underlying monetary asset or liability as an adjustment to interest income or expense. For purchased interest rate options, the premiums paid are included in the statement of financial position under other assets or other liabilities. The premiums are amortised to interest income or expense over the life of the agreements.

(d)

Cash and cash equivalents Cash and cash equivalents in the statements of cash flows comprise cash balances, call deposits and highly liquid short-term investments. Bank overdrafts that are repayable on demand are a component of financing activities for the purpose of the statement of cash flows.

(e)

Trade and other accounts receivable Trade and other accounts receivable are stated at their invoice value less allowance for doubtful accounts. The allowance for doubtful accounts is assessed primarily on analysis of payment histories and future expectations of customer payments. Bad debts are written off when incurred.

(f)

Inventories Inventories are measured at the lower of cost and net realisable value. Cost of slab raw materials are calculated using the weighted average cost principle. Cost of ore materials are calculated using the first-in, first-out principles. Finished goods and rolls that are part of consumable goods are calculated using the specific method and comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. In the case of manufactured inventories and work-in-progress, cost includes an appropriate share of production overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs to complete and to make the sale. 26


underlying monetary asset or liability as an adjustment to interest income or expense. For purchased interest rate options, the premiums paid are included in the statement of financial position under other assets or other liabilities. The premiums are amortised to interest income or expense over the life of the agreements. (d)

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes toand the Financial Statements Cash cash equivalents

Cash and cash equivalents in the statements of cash flows comprise cash balances, call deposits and highly liquid short-term investments. Bank overdrafts that are repayable on demand are a component of financing activities for the purpose of the statement of cash flows. (e)

Trade and other accounts receivable Trade and other accounts receivable are stated at their invoice value less allowance for doubtful accounts. The allowance for doubtful accounts is assessed primarily on analysis of payment histories and future expectations of customer payments. Bad debts are written off when incurred.

(f)

Inventories Inventories are measured at the lower of cost and net realisable value.

Cost of slab raw materials are calculated using the weighted average cost principle. Cost of ore materials are calculated using the first-in, first-out principles. Finished goods and rolls that are part of consumable goods are calculated using the specific method and comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. In the case of manufactured inventories and work-in-progress, cost includes an appropriate Sahaviriya Steel Industries Public Company Limited, share of production overheads based on normal operating capacity.its Subsidiaries

and its Joint Venture

realisable valuestatements is the estimated selling price in the ordinary course of business less the estimated NotesNet to the financial costs to complete and to make the sale.

(g)

Non-current assets held for sale

26

Non-current assets (or disposal groups comprising assets and liabilities) that are expected to be recovered primarily through sale rather than through continuing use, are classified as held for sale. The assets (or disposal group) are measured at the lower of their carrying value and fair value less cost to sell. Any impairment loss on a disposal group is first allocated to goodwill, and then to remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories and financial assets. Impairment losses on initial classification as held for sale and subsequent gains and losses on remeasurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss. (h)

Investments Investments in subsidiaries and joint venture Investments in subsidiaries and joint venture in the separate financial statements of the Company are accounted for using the cost method. Investments in joint venture in the consolidated financial statements are accounted for using the equity method. Disposal of investments On disposal of an investment, the difference between net disposal proceeds and the carrying amount together with the associated cumulative gain or loss that was reported in equity is recognised in profit or loss. If the Group disposes of part of its holding of a particular investment, the deemed cost of the part sold is determined using the weighted average method applied to the carrying value of the total holding of the investment.

(i)

Finance lease The Group entered into sale and lease back agreements for certain machinery and equipment, resulting in a finance lease. Excess of sales proceeds over the carrying amount is not immediately recognised as income. Instead it is deferred and amortised over the lease term. The Group recognised finance leases as assets and liabilities in the statement of financial position at

169


(g)

170

(h)

Non-current assets held for sale Non-current assets (or disposal groups comprising assets and liabilities) that are expected to be recovered primarily through sale rather than through continuing use, are classified as held for sale. The assets (or disposal group) are measured at the lower of their Annual carrying Report 2015value and fair value less cost to Notes to the Financial Statements Sahaviriya Steel Public Company sell. Any impairment loss on a disposal group is first allocated to Industries goodwill, andLimited then to remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories and financial assets. Impairment losses on initial classification as held for sale and subsequent gains and losses on remeasurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss. Investments Investments in subsidiaries and joint venture Investments in subsidiaries and joint venture in the separate financial statements of the Company are accounted for using the cost method. Investments in joint venture in the consolidated financial statements are accounted for using the equity method. Disposal of investments On disposal of an investment, the difference between net disposal proceeds and the carrying amount together with the associated cumulative gain or loss that was reported in equity is recognised in profit or loss. If the Group disposes of part of its holding of a particular investment, the deemed cost of the part sold is determined using the weighted average method applied to the carrying value of the total holding of the investment.

(i)

Finance lease The Group entered into sale and lease back agreements for certain machinery and equipment, resulting in a finance lease. Excess of sales proceeds over the carrying amount is not immediately recognised as income. Instead it is deferred and amortised over the lease term. The Group recognised finance leases as assets and liabilities in the statement of financial position at amounts equal at the inception of the lease to the fair value of the leased property. Lease payments are apportioned between the finance charge and the reduction of the outstanding liabilities. The finance charged is allocated to the periods during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

(j)

Property, plant and equipment Recognition and measurement Owned assets Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses except for land, building and machinery which are stated at their revalued amounts. The revalued amount is the fair value determined on the basis of the property’s existing use at the date of revaluation less any subsequent accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of selfconstructed assets includes the cost of materials and direct labour, any other costs directly attributable 27


(j)

Property, plant and equipment Recognition and measurement Owned assets Notes to the Financial Statements

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses except forSteel land, Industries building and Public machinery which are stated at their amounts. The revalued Sahaviriya Company Limited, itsrevalued Subsidiaries amount is the fair value determined on the basis of the property’s existing use at the date of and its Joint Venture revaluation less any subsequent accumulated depreciation and impairment losses.

Notes to the financial statements

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of selfconstructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition27for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located, and capitalised borrowing costs. Cost also may include transfers from other comprehensive income of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Gains or losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised net within other income in profit or loss. When revalued assets are sold, the amounts included in the revaluation reserve are transferred to retained earnings. Leased assets Leases in terms of which the Group substantially assumes all the risk and rewards of ownership are classified as finance leases. Property, plant and equipment acquired by way of finance leases is capitalised at the lower of its fair value and the present value of the minimum lease payments at the inception of the lease, less accumulated depreciation and impairment losses. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to the profit or loss. Revalued assets Revaluations are performed by independent professional valuers with sufficient regularity to ensure that the carrying amount of these assets does not differ materially from that which would be determined using fair values at the reporting date. Any increase in value, on revaluation, is recognised in other comprehensive income and presented in the revaluation reserve in equity unless it offsets a previous decrease in value recognised in profit or loss in respect of the same asset. A decrease in value is recognised in profit or loss to the extent it exceeds an increase previously recognised in other comprehensive income in respect of the same asset. The revaluation surplus is utilised by reference to the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset’s original cost and transferred directly to equity for revalued assets acquired before the FAP’s announcement of 1 January 2011. For revalued assets acquired since 1 January 2011, the difference transferred directly to retained earnings. Upon disposal of a revalued asset, any remaining related revaluation surplus is transferred directly to retained earnings and is not taken into account in calculating the gain or loss on disposal. Subsequent costs The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Depreciation Depreciation is calculated based on the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value. 28

171


inception of the lease, less accumulated depreciation and impairment losses. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to the profit or loss. 172

Notes to assets the Financial Statements Revalued

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Revaluations are performed by independent professional valuers with sufficient regularity to ensure that the carrying amount of these assets does not differ materially from that which would be determined using fair values at the reporting date. Any increase in value, on revaluation, is recognised in other comprehensive income and presented in the revaluation reserve in equity unless it offsets a previous decrease in value recognised in profit or loss in respect of the same asset. A decrease in value is recognised in profit or loss to the extent it exceeds an increase previously recognised in other comprehensive income in respect of the same asset. The revaluation surplus is utilised by reference to the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset’s original cost and transferred directly to equity for revalued assets acquired before the FAP’s announcement of 1 January 2011. For revalued assets acquired since 1 January 2011, the difference transferred directly to retained earnings. Upon disposal of a revalued asset, any remaining related revaluation surplus is transferred directly to retained earnings and is not taken into account in calculating the gain or loss on disposal. Subsequent costs The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Depreciation and its Joint Venture

Notes Depreciation to the financial statements is calculated based on the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value.

Depreciation is based on a straight-line basis over 28 the estimated useful lives of each component of an item of property, plant and equipment. The estimated useful lives are as follows: Land improvements Leasehold and leasehold improvements Buildings and building improvements Machinery, tools and equipment - in production line - in coke production line - in steel making line - in service line - other tools and equipment Furniture, fixtures and office equipment Vehicles Roads Berth and berth facilities Tug boats Customs cargo warehouse

5 years 5 and 10 years 20 years The unit of production 20 years 20 years 5 – 10 years 3 – 10 years 5 – 10 years 5 years 5, 20 and 27 years 5 and 30 years 5 – 17 years 5 years

Depreciation is charged to profit or loss (depreciation related to revalued assets acquired before 1 January 2011 is calculated based on the asset’s original cost while based on the revalued carrying amount of the asset for revalued assets acquired since 1 January 2011). No depreciation is provided on freehold land or assets under construction and installation. Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. (k)

Intangible assets Intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and accumulated impairment losses. Subsequent expenditure


- in coke production line - in steel making line - in service line - other tools and equipment Furniture, fixtures and office equipment Notes to the Financial Statements Vehicles Roads Berth and berth facilities Tug boats Customs cargo warehouse

20 20 5 – 10 3 – 10 5 – 10 Annual Report 2015 Sahaviriya Steel Industries Public Company Limited 5 5, 20 and 27 5 and 30 5 – 17 5

years years years years years years years years years years

Depreciation is charged to profit or loss (depreciation related to revalued assets acquired before 1 January 2011 is calculated based on the asset’s original cost while based on the revalued carrying amount of the asset for revalued assets acquired since 1 January 2011). No depreciation is provided on freehold land or assets under construction and installation. Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. (k)

Intangible assets Intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and accumulated impairment losses. Subsequent expenditure Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred. Amortisation Amortisation is based on the cost of the asset, or other amount substituted for cost, less its residual value. Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful lives for the current and comparative periods are as follows: Software licenses

3 – 10 years

Amortisation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. 29

173


Subsequent expenditure

174

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or lossAnnual as Report incurred. 2015 Notes to the Financial Statements Sahaviriya Steel Industries Public Company Limited

Amortisation

Amortisation is based on the cost of the asset, or other amount substituted for cost, less its residual value. Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful lives for the current and comparative periods are as follows:

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Jointlicenses Venture Software 3 – 10 years Notes to the financial statements

Amortisation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

(l)

Impairment

29

The carrying amounts of the Group’s assets or its cash-generating unit are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated. For goodwill and intangible assets that have indefinite useful lives or are not yet available for use, the recoverable amount is estimated each year at the same time. An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. The impairment loss is recognised in profit or loss unless it reverses a previous revaluation credited to equity, in which case it is charged to equity. When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is objective evidence that the value of the asset is impaired, the cumulative loss that had been recognised directly in equity is recognised in profit or loss even though the financial asset has not been derecognised. The amount of the cumulative loss that is recognised in profit or loss is the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognised in profit or loss. Calculation of recoverable amount The recoverable amount of held-to-maturity securities carried at amortised cost is calculated as the present value of the estimated future cash flows discounted at the original effective interest rate. The recoverable amount of available-for-sale financial assets is calculated by reference to the fair value. The recoverable amount of a non-financial asset is the greater of the asset’s value in use and fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs. Reversals of impairment An impairment loss in respect of a financial asset is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised in profit or loss. For financial assets carried at amortised cost and available-for-sale financial assets that are debt securities, the reversal is recognised in profit or loss. For available-for-sale financial assets that are equity securities, the reversal is recognised in other comprehensive income. Impairment losses recognised in prior periods in respect of other non-financial assets are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.


equity and there is objective evidence that the value of the asset is impaired, the cumulative loss that had been recognised directly in equity is recognised in profit or loss even though the financial asset has not been derecognised. The amount of the cumulative loss that is recognised in profit or loss is the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognised in profit or loss. Annual Report 2015 Notes to the Financial Statements 175 Sahaviriya Steel Industries Public Company Limited Calculation of recoverable amount

The recoverable amount of held-to-maturity securities carried at amortised cost is calculated as the present value of the estimated future cash flows discounted at the original effective interest rate. The recoverable amount of available-for-sale financial assets is calculated by reference to the fair value. The recoverable amount of a non-financial asset is the greater of the asset’s value in use and fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs. Reversals of impairment An impairment loss in respect of a financial asset is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised in profit or loss. For financial assets carried at amortised cost and available-for-sale financial assets that are debt securities, the reversal is recognised in profit or loss. For available-for-sale financial assets that are equity securities, the reversal is recognised in other comprehensive income. Impairment losses recognised in prior periods in respect of other non-financial assets are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture (m) Interest-bearing liabilities Notes to the financial statements

Interest-bearing liabilities are recognised initially at fair value less attributable transaction charges. Subsequent to initial recognition, interest-bearing liabilities are stated at amortised cost with any difference between cost and redemption value 30 being recognised in profit or loss over the period of the borrowings on an effective interest basis.

(n)

Trade and other accounts payable Trade and other accounts payable are stated at cost.

(o)

Employee benefits Defined contribution plans Obligations for contributions to defined contribution plans are expensed as the related service is provided. Defined benefit plans The Group’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount. The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any application minimum funding requirements. Remeasurements of the net defined benefit liability, actuarial gain or loss are recognised immediately in OCI. The Group determines the interest expense on the net defined benefit liability for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the


Notes to the financial statements

176

difference between cost and redemption value being recognised or loss over the period of the Annual in Reportprofit 2015 Notes to the Financial Statements Sahaviriya Steel Industries Public Company Limited borrowings on an effective interest basis.

(n)

Trade and other accounts payable Trade and other accounts payable are stated at cost.

(o)

Employee benefits Defined contribution plans Obligations for contributions to defined contribution plans are expensed as the related service is provided. Defined benefit plans The Group’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount. The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any application minimum funding requirements. Remeasurements of the net defined benefit liability, actuarial gain or loss are recognised immediately in OCI. The Group determines the interest expense on the net defined benefit liability for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period, taking into account any changes in the net defined benefit liability during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in profit or loss. The Group recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs. Other long-term employee benefits The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurements are recognised in profit or loss in the period in which they arise. Termination benefits Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those benefits and when the Group recognises costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the end of the reporting period, then they are discounted.

31


in OCI. The Group determines the interest expense on the net defined benefit liability for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period, taking into account any changes in the net defined benefit liability during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss. Annual Report 2015 Notes to the Financial Statements 177 Sahaviriya Steel Industries Public Company Limited When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in profit or loss. The Group recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

Other long-term employee benefits The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurements are recognised in profit or loss in the period in which they arise. Termination benefits

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer and its Joint Venture benefits and when the Group recognises costs for a restructuring. If benefits are not expected Notesoftothose the financial statements to be settled wholly within 12 months of the end of the reporting period, then they are discounted.

Short-term employee benefits Short-term employee benefits are expensed as 31 the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. (p)

Provisions A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Environmental liabilities The Group has provided environmental liabilities related to site restoration and related restore existing damage in accordance with the Group’s policy and applicable legal requirements. Onerous contracts A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting the Group’s obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Group recognises any impairment loss on the assets associated with that contract.

(q)

Revenue Revenue excludes value added taxes and is arrived at after deduction of trade discounts and volume rebates. Sale of goods and services rendered Revenue is recognised in profit or loss when the significant risks and rewards of ownership have been transferred to the buyer. No revenue is recognised if there is continuing management involvement with the goods or there are significant uncertainties regarding recovery of the consideration due, associated costs or the probable return of goods. Service income is recognised as services are provided. Dividend income Dividend income is recognised in profit or loss on the date the Group’s right to receive payments is


178

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount isAnnual recognised as finance cost. Report 2015 Notes to the Financial Statements Sahaviriya Steel Industries Public Company Limited

Environmental liabilities

The Group has provided environmental liabilities related to site restoration and related restore existing damage in accordance with the Group’s policy and applicable legal requirements. Onerous contracts A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting the Group’s obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Group recognises any impairment loss on the assets associated with that contract. (q)

Revenue Revenue excludes value added taxes and is arrived at after deduction of trade discounts and volume rebates. Sale of goods and services rendered Revenue is recognised in profit or loss when the significant risks and rewards of ownership have been transferred to the buyer. No revenue is recognised if there is continuing management involvement with the goods or there are significant uncertainties regarding recovery of the consideration due, associated costs or the probable return of goods. Service income is recognised as services are provided. Dividend income Dividend income is recognised in profit or loss on the date the Group’s right to receive payments is established. Interest and other income Interest and other income is recognised in profit or loss as it accrues. Commissions When the Group acts in the capacity of an agent rather than as the principal in a transaction, the revenue recognised is the net amount of commission earned by the Group. 32


Notes to the Financial Statements

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture Notes to the financial statements (r)

Finance costs Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions and contingent consideration, losses on disposal of available-for-sale financial assets, fair value losses on financial assets at fair value through profit or loss, impairment losses recognised on financial assets (other than trade receivables), and losses on hedging instruments that are recognised in profit or loss. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

(s)

Lease payments Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed. Determining whether an arrangement contains a lease At inception of an arrangement, the Group determines whether such an arrangement is or contains a lease. A specific asset is the subject of a lease if fulfilment of the arrangement is dependent on the use of that specified asset. An arrangement conveys the right to use the asset if the arrangement conveys to the Group the right to control the use of the underlying asset. At inception or upon reassessment of the arrangement, the Group separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate the payments reliably, an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. Subsequently the liability is reduced as payments are made and an imputed finance charge on the liability is recognised using the Group’s incremental borrowing rate.

(t)

Income tax Income tax on the profit or loss for the year comprises current tax. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill; the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; and differences relating to investments in subsidiaries and joint venture to the extent that it is probable that they will not reverse in the foreseeable future. The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. 33

179


lease. A specific asset is the subject of a lease if fulfilment of the arrangement is dependent on the use of that specified asset. An arrangement conveys the right to use the asset if the arrangement conveys to the Group the right to control the use of the underlying asset. 180

(t)

At inception or upon reassessment of the arrangement, the AnnualGroup Report 2015 separates payments and other Notes to the Financial Statements Steel Industries Companyfor Limited consideration required by such an arrangement into those for Sahaviriya the lease andPublic those other elements on the basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate the payments reliably, an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. Subsequently the liability is reduced as payments are made and an imputed finance charge on the liability is recognised using the Group’s incremental borrowing rate. Income tax Income tax on the profit or loss for the year comprises current tax. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill; the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; and differences relating to investments in subsidiaries and joint venture to the extent that it is probable that they will not reverse in the foreseeable future.

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Venture TheJoint measurement of deferred tax reflects the tax consequences that would follow the manner in which Notesthe to Group the financial expects,statements at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

33 Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date. In determining the amount of current and deferred tax, the Group takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. The Group believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and may involve a series of judgements about future events. New information may become available that causes the Group to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realised. (u)

Discontinued operations A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of operations that has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative statement of comprehensive income is restated as if the operation had been discontinued from the start of the comparative period.

(v)

Earnings per share The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the


when they reverse, using tax rates enacted or substantively enacted at the reporting date. In determining the amount of current and deferred tax, the Group takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. The Group believes that its accruals for tax liabilities are adequate for all tax years based on its assessment of many Annualopen Report 2015 Notes to theincluding Financial Statements Sahaviriya experience. Steel Industries Public Company factors, interpretations of tax law and prior ThisLimited assessment relies on estimates 181 and assumptions and may involve a series of judgements about future events. New information may become available that causes the Group to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realised. (u)

Discontinued operations A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of operations that has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative statement of comprehensive income is restated as if the operation had been discontinued from the start of the comparative period.

(v)

Earnings per share The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees.

(w)

Segment reporting Segment results that are reported to the Group’s CEO (the chief operating decision maker) include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

4

Related parties For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control or joint control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. 34


182

(w)

weighted average number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees. Annual Report 2015 Notes to the Financial Statements Sahaviriya Steel Industries Public Company Limited Segment reporting Segment results that are reported to the Group’s CEO (the chief operating decision maker) include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

4

Related parties

For the purposes these financial statements, parties are considered be related to the Group if the Sahaviriya Steel ofIndustries Public Company Limited, its toSubsidiaries Group has the ability, directly or indirectly, to control or joint control the party or exercise significant Sahaviriya Steel Industries Public Company Limited, its Subsidiaries andinfluence its Joint overVenture the party in making financial and operating decisions, or vice versa, or where the Group and its Joint Venture Sahaviriya Steel Public Company Limited, itsinfluence. Subsidiaries Notes theparty financial statements andtothe are Industries subject to common control or common significant Related parties may be Notes to the financial statements andindividuals its JointorVenture other entities.

Notes to the financial statements

34 Relationships with subsidiaries and a joint venture are described in Notes 9 and 11. Relationship with Relationships withand subsidiaries andparties a jointwere venture are described in Notes 9 and 11. Relationship with key management other related as follows: key management and other related parties were as follows: Relationships with subsidiaries and a joint venture are described in Notes 9 and 11. Relationship with Country key management and other related parties were asoffollows: Name of entities Country of incorporation Nature of relationships Name of entities incorporation Nature of relationships /Country nationality of Sahaviriya Group Corporation Thailand Major shareholder, 14.69% shareholding and direct / nationality Name of entities incorporation Nature of relationships Sahaviriya Thailand Major shareholder, 14.69% shareholding and direct Limited Group Corporation and indirect shareholding by the Company’s / nationality Limited and indirect shareholding by the Company’s director(s) Sahaviriya Group Corporation Thailand Major shareholder, 14.69% shareholding and direct director(s) Vanomet Switzerland Major shareholder, 19.71% shareholding common Limited Holding AG and indirect shareholding by the and Company’s Vanomet Holding AG Switzerland Major shareholder, 19.71% shareholding and common director with a subsidiary director(s) director with a subsidiary Sahaviriya Inter Steel Thailand Major shareholder, 5.79% shareholding and Vanomet Holding AG Holdings Switzerland Major shareholder, 19.71% shareholding and common Sahaviriya Thailand Major shareholder, 5.79% shareholding and Co., Ltd.Inter Steel Holdings common directors and direct and indirect director with a subsidiary Co., Ltd. Inter Steel Holdings common directors and and indirect shareholding by the Company’s director(s) Sahaviriya Thailand Major shareholder, 5.79%direct shareholding and shareholding by the Company’s director(s) Thai Coated Steel Sheet Co., Ltd. Thailand Shareholding by the Company and common Co., Ltd. common directors and direct and indirect Thai Coated Steel Sheet Co., Ltd. Thailand Shareholding bythethe Company and common directors shareholding by Company’s director(s) directors Bangsaphan Barmill Public Thailand Common directors and direct indirect Thai Coated Steel Sheet Co., Ltd. Thailand Shareholding by the Company andandcommon Bangsaphan Barmill Public Thailand Common directors and direct and indirect Company Limited shareholding by the Company’s director(s) directors Company shareholding by the Company’s director(s) B.S. Metal Limited Co., Ltd. Public Thailand Common directors and direct direct and indirect indirect Bangsaphan Barmill Thailand Common directors and and B.S. Metal Co., Ltd. Thailand Common directors and direct and indirect shareholding by the Company’s director(s) Company Limited shareholding by the Company’s director(s) shareholding by the Company’s director(s) Sahaviriya PlateLtd. Mill Public Thailand Common directors and direct direct and indirect indirect B.S. Metal Co., Thailand Common directors and and Sahaviriya Mill Public Thailand Common directors and direct and indirect CompanyPlate Limited shareholding by the Company’s director(s) shareholding by the Company’s director(s) CompanyBuilding Limited shareholding by the Company’s director(s) Prapawit Property Thailand Common directors and direct direct and indirect indirect Sahaviriya Plate Mill Public Thailand Common directors and and Prapawit Building Property Thailand Common directors and direct and indirect Co., Ltd. shareholding by the Company’s director(s) Company Limited shareholding by the Company’s director(s) Co., Ltd.Building shareholding by the and Company’s director(s) Western Housing Co., Ltd. Thailand Common directors direct shareholding by the Prapawit Property Thailand Common directors and direct and indirect Western Housing Co., Ltd. Thailand Common directors and direct shareholding by the Company’s director(s) Co., Ltd. shareholding by the Company’s director(s) Company’s director(s) Sahaviriya Management Co., Ltd. Thailand Common directors and direct and indirect Western Housing Co., Ltd. Thailand Common directors and direct shareholding by the Sahaviriya Management Co., Ltd. Thailand Common directors and direct and indirect (formerly: Sahaviriya Steel Group shareholding by the Company’s director(s) Company’s director(s) (formerly: Sahaviriya Steel Group shareholding by the Company’s director(s) Co., Ltd.) Sahaviriya Management Co., Ltd. Thailand Common directors and direct and indirect Co., Ltd.) C.A.R. Services Co., Ltd. Thailand The direct by andthe indirect shareholding (formerly: Sahaviriya Steel Group shareholding Company’s director(s) by the C.A.R. Services Co., Ltd. Thailand The direct and indirect shareholding by the Company’s director(s) Co., Ltd.) Company’s director(s) Sahaviriya Panich Corporation Co., Thailand Common directors and direct and indirect C.A.R. Services Co., Ltd. Thailand The direct and indirect shareholding by the Sahaviriya PanichSahaviriya Corporation Co., Thailand Common directors and direct and indirect Ltd. (formerly: Panich shareholding by the Company’s director(s) Company’s director(s) Ltd. (formerly: Sahaviriya shareholding by the Company’s director(s) International Co., Ltd.) Panich Sahaviriya Panich Corporation Co., Thailand Common directors and direct and indirect International Co., Ltd.) Line Transport Co., Ltd. Thailand Common directors with the subsidiary and direct and Ltd. (formerly: Sahaviriya Panich shareholding by the Company’s director(s) Line Transport Co., Ltd. Thailand Common directors with the subsidiary and direct and indirect shareholding by the Company’s director(s) International Co., Ltd.) indirect shareholding by the Company’s director(s) Saha Special Steel Co., Ltd. Thailand The direct and indirect shareholding by the Company Line Transport Co., Ltd. Thailand Common directors with the subsidiary and direct and Saha Special Steel Co., Ltd. Thailand The direct and indirect shareholding by the Company director(s) indirect shareholding by the Company’s director(s) director(s) Bangpakong Lighter Co., Thailand Common directors and directby and indirect Saha Special Steel Co., Ltd.Ltd. Thailand The direct and indirect shareholding the Company Bangpakong Lighter Co., Ltd. Thailand Common directors and direct and indirect shareholding by the Company’s director(s) director(s) shareholding by the Company’s director(s) BangpakongLighter Port Co., Ltd. Thailand Common directors and direct direct and indirect indirect Bangpakong Co., Ltd. Thailand Common directors and and Bangpakong Port Co., Ltd. Thailand Common directors and direct and indirect shareholding by the Company’s director(s) shareholding by the Company’s director(s) shareholding by the Company’s director(s) ABC TradingPort Co.,Co., Ltd.Ltd. (formerly: Thailand Indirect shareholding byand the Company director(s) Bangpakong Thailand Common directors direct and indirect ABC Trading Co., Ltd. (formerly: Thailand Indirect shareholding by the Company director(s) Prachuap Bangsaparn Co., Ltd.) shareholding by the Company’s director(s) Prachuap Bangsaparn Co., Ltd.) Sahaviriya Iron and Steel Thailand Common directorsby the andCompany direct director(s) and indirect ABC Trading Co., Ltd. (formerly: Thailand Indirect shareholding Sahaviriya Iron and Steel Thailand Common directors and direct and indirect Co., Ltd. shareholding by the Company’s director(s) Prachuap Bangsaparn Co., Ltd.) Co., Ltd. shareholding by the Company’s director(s) Thai Steel Sales Co., Ltd. Thailand Common directors and direct and indirect Sahaviriya Iron and Steel Thailand Common directors and direct and indirect Thai Steel Sales Co., Ltd. Thailand Common directors and direct and indirect shareholding by the Company’s director(s) Co., Ltd. shareholding by the Company’s director(s) shareholding by the Company’s director(s) Prachuap Development Thailand Common directors and direct direct and indirect indirect Thai Steel Pattana Sales Co., Ltd. Thailand Common directors and and Prachuap Pattana Development Thailand Common directors and direct and indirect Co., Ltd. shareholding by the Company’s director(s) shareholding by the Company’s director(s) Co., Ltd.Pattana shareholding by the Company’s director(s) Sahaviriya Logistics Co., Ltd. Thailand Common shareholder and directors and and Prachuap Development Thailand Common directors and direct and direct indirect


shareholding by the Company’s director(s) Sahaviriya Plate Mill Public Thailand Common directors and direct and indirect Sahaviriya Steel Industries Public Companyshareholding Limited, by itsthe Subsidiaries Company Limited Company’s director(s) Prapawit Building Property Thailand Common directors and direct and indirect and its Joint Venture Annual Report 2015 Co., Ltd. shareholding by the Company’s director(s) to the Financial Statements 183 Notes Notes to the financial statements Sahaviriya Steel Industries Public Company Limited Western Housing Co., Ltd. Thailand Common directors and direct shareholding by the Company’s director(s) Sahaviriya Management Co., Ltd. Thailand Common directors and direct and indirect Relationships with subsidiaries and a joint venture are described in Notes 9 and 11. Relationship with (formerly: Sahaviriya Steel Group shareholding by the Company’s director(s) key management and other related parties were as follows: Co., Ltd.) C.A.R. Services Co., Ltd. Thailand The direct and indirect shareholding by the Country of Company’s director(s) Name of entities incorporation Nature of relationships Sahaviriya Panich Corporation Co., Thailand Common directors and direct and indirect / nationality Ltd. (formerly: Sahaviriya Panich shareholding by the Company’s director(s) Sahaviriya Group Corporation Thailand Major shareholder, 14.69% shareholding and direct International Co., Ltd.) Limited and indirect shareholding by the Company’s Line Transport Co., Ltd. Thailand Common directors with the subsidiary and direct and director(s) indirect shareholding by the Company’s director(s) Vanomet Holding AG Switzerland Major shareholder, 19.71% shareholding and common Saha Special Steel Co., Ltd. Thailand The direct and indirect shareholding by the Company director with a subsidiary director(s) Sahaviriya Inter Steel Holdings Thailand Major shareholder, 5.79% shareholding and Bangpakong Lighter Co., Ltd. Thailand Common directors and direct and indirect Co., Ltd. common directors and direct and indirect shareholding by the Company’s director(s) shareholding by the Company’s director(s) Bangpakong Port Co., Ltd. Thailand Common directors and direct and indirect Thai Coated Steel Sheet Co., Ltd. Thailand Shareholding by the Company and common shareholding by the Company’s director(s) directors ABC Trading Co., Ltd. (formerly: Thailand Indirect shareholding by the Company director(s) Bangsaphan Barmill Public Thailand Common directors and direct and indirect Prachuap Bangsaparn Co., Ltd.) Company Limited shareholding by the Company’s director(s) Sahaviriya Iron and Steel Thailand Common directors and direct and indirect B.S. Metal Co., Ltd. Thailand Common directors and direct and indirect Co., Ltd. Steel Industries Public Companyshareholding Company’s director(s) Sahaviriya Limited, by itsthe Subsidiaries shareholding by the Company’s director(s) Thai Steel Sales Co., Ltd. Thailand Common directors and direct and indirect Sahaviriya Plate Mill Public Thailand Common directors and direct and indirect and its Joint Venture shareholding by the Company’s director(s) Company Limited shareholding by the Company’s director(s) Notes to thePattana financial statements Prachuap Development Thailand Common directors and direct and indirect Prapawit Building Property Thailand Common directors and direct and indirect Co., Ltd. shareholding by the Company’s director(s) Co., Ltd. shareholding by the Company’s director(s) Sahaviriya Logistics Co., Ltd. Thailand Common shareholder and directors and direct and Western Housing Co., Ltd. Thailand Common directors and direct shareholding by the (formerly: Saha Logistics indirect shareholding by the Company’s director(s) Country of Company’s director(s) Holdings Co., of Ltd.) Name entities incorporation Nature of relationships Sahaviriya Management Co., Ltd. Thailand Common directors and direct and indirect Sahaviriya Shipping Limited Hong Kong Common shareholder and directors and direct and / nationality (formerly: Sahaviriya Steel Group shareholding by the Company’s director(s) indirect shareholding by the Company’s director(s) 35 Co., Ltd.) Sahaviriya Shipping UK Limited United Common and shareholding directors and by indirect C.A.R. Services Co., Ltd. Thailand The directshareholder and indirect the Kingdom shareholding by the Company’s director(s) Company’s director(s) Vanomet Switzerland Common shareholder a SahaviriyaAG Panich Corporation Co., Thailand Common directors and andcommon direct director and with indirect subsidiary Ltd. (formerly: Sahaviriya Panich shareholding by the Company’s director(s) Vanomet Finance Switzerland Common shareholder and common director with a International Co.,AG Ltd.) subsidiary Line Transport Co., Ltd. Thailand Common directors with the subsidiary and direct and Vanomet International AG Switzerland Common shareholder by andthe common director with a indirect shareholding Company’s director(s) subsidiary Saha Special Steel Co., Ltd. Thailand The direct and indirect shareholding by the Company Atlantic Steel AG Switzerland Common director(s)shareholder and common director with a subsidiary directors and direct and indirect Bangpakong Lighter Co., Ltd. Thailand Common Bangpakong Sharp Steel Co., Ltd. Thailand Common directors and direct and indirect shareholding by the Company’s director(s) (formerly: Saha Bangpakong shareholding by the Company’s director(s) Bangpakong Port Co., Ltd. Thailand Common directors and direct and indirect Steel Co., Ltd.) shareholding by the Company’s director(s) Steel Ltd. Thailand Common directorsby the andCompany direct director(s) and indirect ABC Process Trading Holdings Co., Ltd. Co., (formerly: Thailand Indirect shareholding (formerly: Saha Steel Process shareholding by the Company’s director(s) Prachuap Bangsaparn Co., Ltd.) Holdings Iron Co., and Ltd.)Steel Sahaviriya Thailand Common directors and direct and indirect Sahaviriya Thailand Common directors and direct and indirect Co., Ltd. Capital Holdings Co., shareholding by the Company’s director(s) Ltd.Steel Sales Co., Ltd. shareholding by the Company’s director(s) Thai Thailand Common directors and direct and indirect Bangna 26 Property Co., Ltd. Thailand Common directors and direct and indirect shareholding by the Company’s director(s) shareholding by the Company’s Prachuap Pattana Development Thailand Common directors and directdirector(s) and indirect Praram 3 Thasai Co., Ltd. Thailand Common directors direct shareholding Co., Ltd. shareholding by theand Company’s director(s) by the (formerly:Logistics Sahaviriya Panich Company’s director(s)and directors and direct and Sahaviriya Co., Ltd. Co., Thailand Common shareholder Ltd.) (formerly: Saha Logistics indirect shareholding by the Company’s director(s) KP Captial Co., Co., Ltd.) Ltd. Thailand Common directors and direct and indirect Holdings shareholding by the Company’s director(s) Sahaviriya Shipping Limited Hong Kong Common shareholder and directors and direct and Pichai Agriculture & Land Co., Thailand35 Common directors and direct shareholding by the Ltd. Company’s director(s) Long Steel Trading Co., Ltd.) Thailand Common directors and direct and indirect (formerly: Saha Long Steel shareholding by the Company’s director(s) Holding Co., Ltd.) Sahaviriya Credit Foncier Co., Ltd. Thailand Common directors and direct shareholding by the Company’s director(s) Sahaviriya Orchid Co., Ltd. Thailand Common directors and direct and indirect


subsidiary Common shareholder and common director with a Sahaviriya Steel Industries Public Companysubsidiary Limited, its Subsidiaries Vanomet International AG Switzerland Common shareholder and common director with a and its Joint Venture Annual Report 2015 subsidiary Notesfinancial to the Financialstatements Statements 184 Notes to the Sahaviriya Steel Industries Public Company Limited Atlantic Steel AG Switzerland Common shareholder and common director with a subsidiary Bangpakong Sharp Steel Co., Ltd. Thailand Common directors and direct and indirect Relationships with subsidiaries and a joint venture areshareholding described in by Notes 9 and 11. Relationship (formerly: Saha Bangpakong the Company’s director(s) with key management and other related parties were as follows: Steel Co., Ltd.) Steel Process Holdings Co., Ltd. Thailand Common directors and direct and indirect Country of (formerly: Saha Steel Process shareholding by the Company’s director(s) Name of entities incorporation Nature of relationships Holdings Co., Ltd.) / nationality Sahaviriya Capital Holdings Co., Thailand Common directors and direct and indirect Sahaviriya Group Corporation Thailand Major shareholder, shareholding Ltd. shareholding by the14.69% Company’s director(s)and direct Limited and indirect shareholding by Bangna 26 Property Co., Ltd. Thailand Common directors and direct theandCompany’s indirect director(s) shareholding by the Company’s director(s) Vanomet HoldingCo., AGLtd. Switzerland Major shareholder, shareholding and common Praram 3 Thasai Thailand Common directors19.71% and direct shareholding by the director with a subsidiary (formerly: Sahaviriya Panich Co., Company’s director(s) Sahaviriya Inter Steel Holdings Thailand Major shareholder, 5.79% shareholding and Ltd.) Co., Ltd. common directors and direct and indirect KP Captial Co., Ltd. Thailand Common directors and direct and indirect shareholding by the Company’s director(s) shareholding by the Company’s director(s) Thai Coated Steel Sheet Co., Ltd. Thailand Shareholding by the Company and common Pichai Agriculture & Land Co., Thailand Common directors and direct shareholding by the directors Ltd. Company’s director(s) Bangsaphan Barmill Public Thailand Common directors and direct and indirect Long Steel Trading Co., Ltd.) Thailand Common directors and direct and indirect Company Limited shareholding by the Company’s director(s) (formerly: Saha Long Steel shareholding by the Company’s director(s) B.S. Metal Co., Ltd. Thailand Common directors and direct and indirect Holding Co., Ltd.) shareholding by the Company’s director(s) Sahaviriya Credit Foncier Co., Ltd. Thailand Common directors and direct shareholding by the Sahaviriya Plate Mill Public Thailand Common directors and direct and indirect Company’s director(s) Company Limited shareholding by the Company’s director(s) Sahaviriya Orchid Co., Ltd. Thailand Common directors and direct and indirect Prapawit Building Property Thailand Common directors and direct and indirect shareholding by the Company’s director(s) Co., Ltd. shareholding by the Company’s director(s) Surasak Muang-Chol Property Co., Thailand Common directorsand and and indirect Western Housing Co., Ltd. Thailand Common directors directdirect shareholding by the Ltd. shareholding by the Company’s director(s) Company’s director(s) Bangsaphan Steel Trading Co., Ltd. Thailand Common directors directdirect shareholding by the Sahaviriya Management Co., Ltd. Thailand Common directorsandand and indirect Company’s director(s) (formerly: Sahaviriya Steel Group shareholding by the Company’s director(s) C Co., B S Consultant Co., Ltd. Thailand Common directors and direct shareholding by the Ltd.) Company’s C.A.R. Services Co., Ltd. Thailand The direct director(s) and indirect shareholding by the SMI Trading Co., Ltd. Thailand Common and indirect Company’sdirectors director(s)and direct shareholding by the Company’s director(s) Sahaviriya Steel Corporation Industries Public Company Limited, its Subsidiaries Sahaviriya Panich Co., Thailand Common directors and direct and indirect SMI Product Co.,Sahaviriya Ltd. Thailand Common directors and direct and indirect Ltd. (formerly: Panich shareholding by the Company’s director(s) and its Joint Venture shareholding by the Company’s director(s) International Co., Ltd.) Notes to the financial statements Bangpakong Steel Co., Thailand Common directors directors direct anddirect indirect Line Transport Co.,Holdings Ltd. Thailand Common withand the subsidiary and and Ltd. (formerly: SST Bangpakong shareholding by the Company’s director(s) indirect shareholding by the Company’s director(s) Co.,Special Ltd.) Steel Co., Ltd. Saha Thailand The direct and indirect shareholding by the Company Country Tong Real Estate Co., Ltd. Thailandof Common and indirect director(s) directors and direct Name of entities incorporation Nature of relationships shareholding by the Company’s director(s) Bangpakong Lighter Co., Ltd. Thailand Common directors and direct and indirect / nationality Krisna Residence Co., Ltd. Thailand Common directors and direct and indirect shareholding by the Company’s director(s) shareholding by the Company’s director(s) 36 Bangpakong Port Co., Ltd. Thailand Common directors and direct and indirect Growth Water Woods Co., Ltd. Thailand Common directors and direct and indirect shareholding by the Company’s director(s) shareholding by the Company’s director(s) ABC Trading Co., Ltd. (formerly: Thailand Indirect shareholding by the Company director(s) Chonglom Co.,Co., Ltd.Ltd.) Thailand Common directors and direct and indirect PrachuapProperty Bangsaparn shareholding by the Company’s director(s) Sahaviriya Iron and Steel Thailand Common directors and direct and indirect Chumphontanee Property Co., Ltd. Thailand Common directors and direct and indirect Co., Ltd. shareholding by the Company’s director(s) shareholding by the Company’s director(s) Thai Steel Sales Co., Ltd. Thailand Common directors and direct and indirect Soi Hiland Property Co., Ltd. Thailand Common directors and direct and indirect shareholding by the Company’s director(s) shareholding by the Company’s director(s) Prachuap Pattana Development Thailand Common directors and direct and indirect Larn Thailand Common directors and directdirector(s) and indirect Co.,Pharam Ltd. 3 Property Co., Ltd. shareholding by the Company’s shareholding by the Company’s director(s) Sahaviriya Logistics Co., Ltd. Thailand Common shareholder and directors and direct and North-South Property Co., Thailand Common directors by andthe direct indirect (formerly: Sathorn Saha Logistics indirect shareholding Company’sand director(s) Ltd. shareholding by the Company’s director(s) Holdings Co., Ltd.) Sahaviriya Shipping Limited Hong Kong Common directors shareholder directors and directbyand Prachuap Steel Co., Ltd. Thailand andand indirect shareholding the Company’s director(s) 35 Pomprachul Steel Co., Ltd. Thailand Common directors and indirect shareholding by the Company’s director(s) Bangplakod Steel Co., Ltd. Thailand Common directors and indirect shareholding by the (formerly: Saha H-Beem Co., Company’s director(s) Ltd.) Panich holdings Co., Ltd. Thailand Common directors and direct and indirect (formerly: Saha Panich holding shareholding by the Company’s director(s) Vanomet Finance AG

Switzerland


Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Sahaviriya Industries Public Company Limited, its Subsidiaries and its JointSteel Venture and its Joint Venture Notes to the financial statements Annual Report 2015 to the Financial Statements Notes Notes to the financial statements

Sahaviriya Steel Industries Public Company Limited

Country of Relationships subsidiaries and aincorporation joint venture are described in Nature Notes 9ofand 11. Relationship with Name with of entities relationships key management and other related parties were as follows: / nationality Growth Water Woods Co., Ltd. Name of entities Chonglom Property Co., Ltd. Sahaviriya Group Corporation Limited Chumphontanee Property Co., Ltd. Vanomet Holding AG Soi Hiland Property Co., Ltd.

Country Thailandof incorporation / nationality Thailand Thailand

Thailand Switzerland Thailand

Sahaviriya Inter Steel Holdings Larn Co.,Pharam Ltd. 3 Property Co., Ltd.

Thailand Thailand

North-South Sathorn Property Thai Coated Steel Sheet Co., Ltd.Co., Ltd. Prachuap Steel Co., Ltd. Bangsaphan Barmill Public Company Limited Pomprachul SteelLtd. Co., Ltd. B.S. Metal Co.,

Thailand Thailand

Bangplakod SteelMill Co.,Public Ltd. Sahaviriya Plate (formerly: Saha H-Beem Co., Company Limited Ltd.) Building Property Prapawit Panich holdings Co., Ltd. Co., Ltd. (formerly: Saha Panich holding Western Housing Co., Ltd. Co., Ltd.) SSP Asset Co., Ltd. Sahaviriya Management Co., Ltd. (formerly: Sahaviriya Steel Group SVCo., Nittan Ltd.)Co., Ltd. C.A.R. Services Co., Ltd. Phrapradaeng Sharp Steel Co., Ltd. Sahaviriya Panich Corporation Co., Amarin Steel Co.,Sahaviriya Ltd. Ltd. (formerly: Panich International Co., Ltd.) Phupen Co., Ltd.Co., Ltd. Line Transport

Thailand Thailand

SahaHeng Special Steel Co.,Co., Ltd.Ltd. Kim Seng Steel

Thailand

Bangpakong LighterHolding Co., Ltd. Saha Land Property Co., Ltd. Bangpakong Port Co., SCJ & Associates Co., Ltd. Ltd.

Thailand

Co.,Ltd. Ltd. (formerly: TABC C HTrading Asset Co., Prachuap Bangsaparn Co., Ltd.) SahaviriyaProperty Iron and Sale SteelCo., Ltd. Thanarom Co., Ltd. Thai Steel SalesCo., Co.,Ltd. Ltd. Thipayasombat

Thailand

Prachuap Pattana personnel Development Key management Co., Ltd. Sahaviriya Logistics Co., Ltd. (formerly: Saha Logistics Holdings Co., Ltd.) Sahaviriya Shipping Limited

Thailand Thailand

Thailand Thailand Thailand Thailand

Thailand Thailand Thailand

Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand

Thailand

Thailand Thailand Thailand Thailand

Thailand Hong Kong 35 37

185

shareholding by the Company’s director(s) Common directors and direct and indirect of relationships shareholdingNature by the Company’s director(s) Common directors and direct and indirect Major shareholder, shareholding shareholding by the14.69% Company’s director(s)and direct and indirect shareholding by the Company’s Common directors and direct and indirect director(s) shareholding by the Company’s director(s) Major shareholder, 19.71% shareholding and common Common directors and direct and indirect director with a subsidiary shareholding by the Company’s director(s) Major shareholder, 5.79% shareholding and Common and direct direct andandindirect indirect common directors directors and shareholding by the Company’s director(s) shareholding by the Company’s director(s) Common directors direct andand indirect Shareholding by the and Company common shareholding by the Company’s director(s) directors Common directors indirect shareholding by the Common directorsandand direct and indirect Company’s director(s) shareholding by the Company’s director(s) Common directors indirect shareholding by the Common directorsandand direct and indirect Company’s director(s) shareholding by the Company’s director(s) Common directors indirect shareholding by the Common directorsandand direct and indirect Company’s director(s) shareholding by the Company’s director(s) Common directors and direct and indirect Common directors and direct and indirect shareholding by the Company’s director(s) shareholding by theand Company’s director(s) by the Common directors direct shareholding Company’s director(s) Common directors directors and and direct direct and and indirect indirect Common shareholding by bythe theCompany’s Company’sdirector(s) director(s) shareholding Common directors and indirect shareholding by the Company’s The direct director(s) and indirect shareholding by the Common directors and indirect shareholding by the Company’s director(s) Company’sdirectors director(s)and direct and indirect Common Common directors and direct and indirect shareholding by the Company’s director(s) shareholding by the Company’s director(s) Common directors directorswith and the indirect shareholding byand the Common subsidiary and direct Company’s director(s) indirect shareholding by the Company’s director(s) The direct and indirect shareholding the Company Common directors and directby and indirect director(s) shareholding by the Company’s director(s) Common directorsandand direct and indirect Common directors indirect shareholding by the shareholding by the Company’s director(s) Company’s director(s) Common Common directors directors and and direct direct and and indirect indirect shareholding shareholding by by the the Company’s Company’sdirector(s) director(s) Indirect shareholding the Company Common directorsby and direct director(s) and indirect shareholding by the Company’s director(s) Common Common directors directors and and direct direct and and indirect indirect shareholding shareholding by by the the Company’s Company’sdirector(s) director(s) Common directorsandand direct and indirect Common directors indirect shareholding by the shareholding by the Company’s director(s) Company’s director(s) Common directors and direct and indirectfor Persons having authority and responsibility shareholding by the Company’s director(s) planning directing and controlling the activities of Common shareholder direct and the entity, directly and or directors indirectly,andincluding any indirect shareholding by the Company’s director(s) director (whether executive or otherwise) of the Group. Common shareholder and directors and direct and


Co., Ltd.) SSP Asset Co., Ltd.

Thailand

Common

directors

and

direct

and

indirect

by the Company’s director(s) Sahaviriya Steel Industries Public Companyshareholding Limited, its Subsidiaries SV Nittan Co., Ltd. Thailand Common directors and indirect shareholding by the and its Joint Venture Annual Report 2015

Company’s director(s) Sahaviriya Steel Industries Public Company Limited Common directors and indirect shareholding by the Company’s director(s) Amarin Steel Co., Ltd. Thailand Common directors and direct and indirect Relationships with subsidiaries and a joint venture areshareholding described in by Notes 9 and 11. Relationship the Company’s director(s) with key management and other related parties were as follows: Phupen Co., Ltd. Thailand Common directors and indirect shareholding by the Company’s director(s) Country Kim Heng Seng Steel Co., Ltd. Thailandof Common directors and direct and indirect Name of entities incorporation of relationships shareholding Nature by the Company’s director(s) / nationality Saha Land Property Holding Thailand Common directors and indirect shareholding by the Sahaviriya Group Corporation Thailand Major shareholder, 14.69% shareholding and direct Co., Ltd. Company’s director(s) Limited and indirect shareholding by the Company’s SCJ & Associates Co., Ltd. Thailand Common directors and direct and indirect director(s) shareholding by the Company’s director(s) Vanomet Holding AG Switzerland Major shareholder, 19.71% shareholding and common T C H Asset Co., Ltd. Thailand Common directors and direct and indirect director with a subsidiary shareholding by the Company’s director(s) Sahaviriya Inter Steel Holdings Thailand Major shareholder, 5.79% shareholding and Thanarom Thailand Common directors and and direct direct and and indirect indirect Co., Ltd.Property Sale Co., Ltd. common directors shareholding by the Company’s director(s) shareholding by the Company’s director(s) Thipayasombat Co., Ltd. Thailand Common directors and indirect shareholding by the Thai Coated Steel Sheet Co., Ltd. Thailand Shareholding by the Company and common Company’s director(s) directors Key management personnel Thailand Persons authority Bangsaphan Barmill Public Thailand Common having directors and and direct responsibility and indirectfor planning directing controlling the activities of Company Limited shareholding by the and Company’s director(s) the entity,directors directly and or indirectly, including any B.S. Metal Co., Ltd. Thailand Common direct and indirect director (whether otherwise) of the shareholding by the executive Company’sordirector(s) Group. Sahaviriya Plate Mill Public Thailand Common directors and direct and indirect Company Limited shareholding by the Company’s director(s) Prapawit Building Property Thailand37 Common directors and direct and indirect Co., Ltd. shareholding by the Company’s director(s) Western Housing Co., Ltd. Thailand Common directors and direct shareholding by the Company’s director(s) Sahaviriya Management Co., Ltd. Thailand Common directors and direct and indirect (formerly: Sahaviriya Steel Group shareholding by the Company’s director(s) Co., Ltd.) C.A.R. Services Co., Ltd. Thailand The direct and indirect shareholding by the Company’s director(s) Sahaviriya Panich Corporation Co., Thailand Common directors and direct and indirect Ltd. (formerly: Sahaviriya Panich shareholding by the Company’s director(s) International Co., Ltd.) Line Transport Co., Ltd. Thailand Common directors with the subsidiary and direct and indirect shareholding by the Company’s director(s) Saha Special Steel Co., Ltd. Thailand The direct and indirect shareholding by the Company director(s) Bangpakong Lighter Co., Ltd. Thailand Common directors and direct and indirect shareholding by the Company’s director(s) Bangpakong Port Co., Ltd. Thailand Common directors and direct and indirect shareholding by the Company’s director(s) ABC Trading Co., Ltd. (formerly: Thailand Indirect shareholding by the Company director(s) Prachuap Bangsaparn Co., Ltd.) Sahaviriya Iron and Steel Thailand Common directors and direct and indirect Co., Ltd. shareholding by the Company’s director(s) Thai Steel Sales Co., Ltd. Thailand Common directors and direct and indirect shareholding by the Company’s director(s) Prachuap Pattana Development Thailand Common directors and direct and indirect Co., Ltd. shareholding by the Company’s director(s) Sahaviriya Logistics Co., Ltd. Thailand Common shareholder and directors and direct and (formerly: Saha Logistics indirect shareholding by the Company’s director(s) Holdings Co., Ltd.) Sahaviriya Shipping Limited Hong Kong Common shareholder and directors and direct and 35

Notesfinancial to the Financialstatements Statements 186 Notes to the

Phrapradaeng Sharp Steel Co., Ltd.

Thailand


Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture Notes to the Industries Financial Statements Sahaviriya Steel Public Company Limited, its Subsidiaries Sahaviriya Steel Industries Notes to the financial statementsPublic Company Limited, its Subsidiaries and and its its Joint Joint Venture Venture

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes Notes to to the the financial financial statements statements

The pricing policies for particular types of transactions are explained further below: The pricing policies for particular types of transactions are explained further below: Transactions of the Company with subsidiary companies The pricing policies for particular types of transactions are explained further below: and joint venture Transactions of the Company with subsidiary companies Transactions of the Company with subsidiary companies and joint venture and joint Sale of goods Third party venture pricing used, dependent on volume and relevant market considerations. Sale of goods Third party pricing used, dependent on volume and relevant Sale of goods Third services party pricing used,aredependent volume and relevant Rendering of port services Port rendered charged on based on Ministry of market considerations. market considerations. Transportation-determined rates, dependent on service Rendering of port services Port services renderedmarket are charged based on Ministry of volume and relevant considerations. Rendering of port services Port services rendered are charged based on Ministry of Transportation-determined rates, dependent on service Transportation-determined rates, dependent on service Rendering of other services Charges renderingmarket of services and maintenance-related volume for and relevant considerations. volume and relevant market considerations. services are based on agreements and common credit term. Rendering of other services Charges for rendering of services and maintenance-related Rendering of other services Charges for rendering of services and maintenance-related Dividend income Right to receive dividends services are based on agreements and common credit term. services are based on agreements and common credit term. Other income Sales scrap material are priced based on scrap weight and the Dividend income Right of to receive dividends Dividend income Right to set receive dividends prices by the Company. Other income Sales of scrap material are priced based on scrap weight and the Other income Sales of scrap material aremanagement priced basedstaff on scrap weight and and the Revenue from providing to subsidiaries prices set by the Company. prices set by the joint venture are Company. based on agreements. Revenue from providing management staff to subsidiaries and Revenue from providing managementare staff to subsidiaries and Purchase of goods Purchases of goods for on production joint venture are based agreements. based on third party joint basedand on agreements. pricesventure under are terms conditions normally applicable to Purchase of goods Purchases of goods for production are based on third party similar transactions. Purchase of goods Purchases of goods for production are based on third party prices under terms and conditions normally applicable to prices purchases under terms normally applicableand to Certain of and steel conditions slab between the company similar transactions. similar transactions. subsidiaries are based on the agreed price formula. Certain purchases of steel slab between the company and Certain purchases steel slab between the company and Purchases of rolls areofchanged agreed prices. subsidiaries are based on the on agreed price formula. subsidiaries are based on the agreed price formula. Purchases of rolls are changed on agreed prices. Purchases of rolls are changed on agreed prices.

38 38 38

Transactions with related companies Transactions with related companies Transactions with related companies Third party pricing used, dependent on volume and relevant market considerations. Third party pricing used, dependent on volume and relevant market Third party pricing dependent on on volume andofrelevant market Port services renderedused, are charged based Ministry Transportationconsiderations. considerations. determined rates, dependent on service volume and relevant market Port services rendered are charged based on Ministry of Transportationconsiderations. Port services rendered are charged based on Ministry of Transportationdetermined rates, dependent on service volume and relevant market determined rates, dependent on and service volume and relevant market Charges for rendering of services maintenance-related services are considerations. considerations. based on agreements and common credit term. Charges for rendering of services and maintenance-related services are Charges for rendering of services and maintenance-related services are Right to on receive dividends. based agreements and common credit term. based on agreements and common credit term. Sales scrap material are priced based on scrap weight and the prices set Right of to receive dividends. Right to receive dividends. by the Company. Sales of scrap material are priced based on scrap weight and the prices set Sales of scrap priced basedstaff on scrap weight and the Revenue from material providingaremanagement to related parties are prices based set on by the Company. by the Company. agreements. Revenue from providing management staff to related parties are based on Revenue from providing staff related parties price. are based on Purchases of raw materialmanagement for production aretobased on market agreements. agreements. Purchases of raw material for production are based on market price. Purchases of raw material for production are based on market price.

187


Sahaviriya Steel Company Limited, its Subsidiaries Notes to the Industries Financial StatementsPublic Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture and its Joint Venture Notes to the financial statements

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

188

Notes to the financial statements

Transactions of the Company with subsidiary companies Transactions of the Company with subsidiary companies and joint venture and joint venture

Transactions with related companies Transactions with related companies

Receiving of other services Maintenance-related services are charged based on long-term Transportation charges are based on agreements, dependent Receiving of other services Maintenance-related are charged based on agreement long-term Transportation charges are based on agreements, dependent maintenance serviceservices agreements. The term of the weight and distance. maintenance service agreements. The term of the agreement weight and distance. can be modified according to business circumstances. Warehouse rental is charged based on rental agreements. can be modified according to business circumstances. Warehouse rental is charged based on rental agreements. Cut sheet services are charged based on agreements. Cut sheet services are charged based on agreements. Rental charges for staff accommodation are fixed on an annual Rental charges forlessor. staff accommodation are fixed on an annual agreed with the agreed with the lessor. Receiving of port services Port services rendered are charged based on Ministry of Receiving of port services Port services rendered are rates, charged based ononservice Ministry of Transportation-determined dependent volume Transportation-determined rates, dependent on service volume and relevant market considerations. and relevant market considerations. Selling and administrative Selling and administrative expense expense

Port services rendered are charged based on Port services rendered are charged based on Transportation-determined rates, dependent Transportation-determined rates, dependent volume and relevant market considerations. volume and relevant market considerations.

Ministry of Ministry of on service on service

Interest and financial Interest and financial charges charges

39 39

on cargo on cargo

basis and basis and

Domestic transportation services are charged based on agreements, Domestic services are charged based on agreements, dependenttransportation on cargo weight and distance. dependent on cargo weight and distance. Office rental is charged based on rental agreements. Office rental is charged based on rental agreements. Rental charges for staff accommodation are fixed on an annual basis and Rental charges forlessor. staff accommodation are fixed on an annual basis and agreed with the agreed with the lessor. Commission expense is charged based on agreements. Commission expense is charged based on agreements. Interest and financial charges are based on agreed rate, which Interest and financial charges are based on agreed rate, which approximates a market rate. approximates a market rate.


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes to the Financial Statements

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture Sahaviriya Steel Industries Notes to the financial statements Public Company Limited, its Subsidiaries and its Joint Venture

189

Notes to the financial statements

Significant transactions for the years ended 31 December with related parties were as follows: Consolidated Separate Significant transactions for the years ended 31 December with related parties were as follows:

Unit: Thousand Baht financial statements financial statements 2015 2014 2015 Consolidated financial statements SeparateSeparate financial2014 statements Consolidated (in thousand Baht) financial statements financial statements Year ended 31 December 2015 2014 2015 2014 Subsidiaries 2015 2014 2015 2014 Year ended 31 December - (in thousand Baht) 295,063 (*) 375,315 (*) Purchases of goods and receiving of services 6,549 Purchases of machinery and equipment Subsidiaries --30,600 83,400 Dividend income 295,063 (*) 375,315 (*) Purchases of goods and receiving of services --28,822 (*) 26,143 Other income 6,549(*) Purchases of machinery and equipment 974 352 Finance costs 30,600 83,400 Dividend income Year ended 31 December

28,822 (*) 26,143 (*) Other income Joint venture 974 352 Finance costs 70,365 (*) 1,484,952 (*) 70,240 1,484,564 Sales of goods 162,819 151,067 79,935 65,304 Rendering of services Joint venture 625 (*) 2,759 (*) 625 2,751 Purchases of goods and receiving of services 70,365 (*) 1,484,952 (*) 70,240 1,484,564 Sales of goods 10,099 (*) 11,017 (*) 10,094 11,015 Other income 162,819 151,067 79,935 65,304 Rendering of services 1,523 2,883 1,456 2,841 Selling and administrative expensesof services 625 (*) 2,759 (*) 625 2,751 Purchases of goods and receiving 10,099 (*) 11,017 (*) 10,094 11,015 Other income Other related parties 1,523 2,883 1,456 2,841 Selling and administrative expenses 7,828,718 (*) 20,565,115 (*) 7,828,672 20,565,107 Sales of goods 253,586 22,221 234,829 Rendering of services Other related parties Purchases of goods and receiving of services 7,828,718 (*) 20,565,115 (*) 7,828,672 20,565,107 Sales of goods 1,533,318 2,342,720 (including of other expense related) 253,586(*) 2,342,795 22,221(*) 1,524,859 234,829 Rendering services 6,513 (*) 4,684 3,686 3,170 Other income Purchases of goods and receiving of services 387,019 (*)(*) 2,342,795 279,938 (*) 1,524,859 381,832 272,813 Selling and administrative 1,533,318 2,342,720 (including other expenseexpenses related) 27,789 (*) 54,344 (*) 27,736 54,344 Finance costs 6,513 (*) 4,684 3,686 3,170 Other income 387,019 (*) 279,938 381,832 272,813 Selling and administrative expenses 27,789 (*) 54,344 (*) 27,736 54,344 Finance costs Key management personnel Key management personnel compensation 72,764 (*) 73,711 (*) Short-term benefits 53,181 61,460 Key management personnel 1,931 1,814 Statutory severance pay compensation 1,809 1,700 Key management personnel 16 (*) 15 (*) Other long-term benefits 13 12 72,764 73,711 Short-term benefits 53,181 61,460 Total key management 1,931 1,814 Statutory severance paypersonnel 1,809 1,700 74,71116 75,54015 compensation 55,00313 63,17212 Other long-term benefits Total key management personnel (*) Excludes transactions with Sahaviriya Steel Industries 74,711 UK Limited. 75,540 compensation 55,003 63,172

(*) Excludes transactions with Sahaviriya Steel Industries UK Limited.

40 40


Notes to theSteel FinancialIndustries Statements 190 Sahaviriya

Public Company Limited, itsIndustries Subsidiaries Sahaviriya Steel Public Company Limited Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture and Venture Notesits to Joint the financial statements Annual Report 2015

Notes to the financial statements

Significant transactions with Sahaviriya Steel Industries UK Limited for the period from 1 January 2015 Significant Sahaviriya Steelwith Industries Limited for the period from 1 January 2015 to 2 Octobertransactions 2015 (date with of deconsolidation) SSI UKUK were as follows: to 2 October 2015 (date of deconsolidation) with SSI UK were as follows: Consolidated Consolidated financial statements financial statements For the financial For the Consolidated statements

For the period from

Forended the year

October 2015 2015

2014

Separate Separate Unit: Thousand Baht financial statements financial statements For thefinancial For the Separate statements

For the period from

period thefrom For31 the For from the year ended period 1For January 1 January period from year ended period from 12015 January 31 12015 January to 2 to 31 December to2015 2 to 1 January 2015 December 1 January 2015 to 2 December 2015 to October 2014 October 2 October 2015 2014 2 October 22015 Subsidiaries Subsidiaries Purchases of goods and receiving of services Purchases of goods and receiving of services Other income Other income Joint venture Joint of venture Sales goods and materials Sales of goods and materials Purchases of goods and receiving of services Purchases of goods and receiving of services Other income Other income Other related parties Other Sales ofrelated goods parties and materials Sales of goods and materials Purchases of goods and receiving of services Purchases ofother goodsexpense and receiving (including related)of services (including Other incomeother expense related) Other income Selling and administrative expenses Selling and administrative expenses Finance costs Finance costs

-

October 2015 2015 (in thousand Baht)

(in thousand Baht) 5,860,374 5,860,374 23,433 23,433

Forended the year the yearFor ended 31 year ended 31 December 31 December December 2014 2014 2014 14,601,944 14,601,944 33,258 33,258

196,135 196,135 487,409 487,409 36,881 36,881

403,376 403,376 736,759 736,759 53,340 53,340

-

-

10,469,817 10,469,817 13,153,350 13,153,350 3,419 3,419 371,230 371,230 83,671 83,671

14,902,358 14,902,358 26,519,306 26,519,306 132,319 132,319

-

-

43,528 43,528 43,528 43,528

69,526 69,526 69,526 69,526

-

-

Key management personnel Key managementpersonnel personnelcompensation Key management Key management personnel compensation Short-term benefits Short-term benefits Total key management personnel Total key management personnel Compensation Compensation

41 41

-


Notes to the Financial Statements

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its JointSteel Venture Sahaviriya Industries Public Company Limited, its Subsidiaries

191

Notes to the financial statements

and its JointSteel Venture Sahaviriya Industries Public Company Limited, its Subsidiaries Notes to the financial statements and its Joint Venture

For fromstatements 1 January 2015 to 2 October 2015, intercompany sales to other related parties Notes to the theperiod financial

described above excluded indirect sales of goods from a subsidiary to the Company through a related For the period January(2014: 2015 to 2 October sales to other related parties company of Bahtfrom 5,7901 million 8,126 million)2015, whichintercompany have been eliminated in the consolidation described above excluded indirect sales of goods from a subsidiary to the Company through a related financial statements. For the period from 1 January 2015 to 2 October 2015, intercompany sales to other related parties company of Baht 5,790 million (2014: 8,126 million) which have been eliminated in the consolidation described above excluded indirect sales of goods from a subsidiary to the Company through a related financial statements. Balances as Baht at 315,790 December related parties werewhich as follows: company of millionwith (2014: 8,126 million) have been eliminated in the consolidation financial statements. Balances as at 31 Decemberfrom with related parties wereConsolidated as follows: Trade accounts receivable Separate Unit: Thousand Baht related parties financial statements financial statements Balances as at 31 December with related parties were as follows: Trade accounts receivable from related parties Consolidated Consolidated Separate Separate statements 2015 financial statements 2014 2015financial 2014 financial statements financial statements (in thousand Baht) 2015 2014 2015 Trade accounts receivable from related parties Consolidated Separate 2014 2015 2014 2015 2014 Joint venture financial statements financial statements (in thousand Baht) 2015 2014 2015 2014 Thai Cold Rolled Steel Sheet Joint venture (in6,117 thousand Baht) Public Company Limited 14,125 Thai Cold Rolled Steel Sheet Joint venture Public Company Limited 14,125 6,117 Thai Cold Rolled Steel Sheet Other related parties Public Company 14,125 6,117 B.S. Metal Co.,parties Ltd.Limited 2,292,481 2,298,199 2,292,360 2,298,131 Other related Sahaviriya Panich Corporation Co., Ltd. B.S. Metal Co., Ltd. 2,292,481 2,298,199 2,292,360 2,298,131 Other relatedSahaviriya parties Panich (formerly: Sahaviriya Panich Corporation Co., Ltd. B.S. Metal Co., Ltd. 2,292,481 2,298,199 2,292,360 2,298,131 International Co., Ltd)Panich 2,147,659 2,230,869 2,147,659 2,230,869 (formerly: Sahaviriya Panich Corporation Co., Ltd. Sahaviriya Plate Mill Public Company International Co., Ltd) 2,147,659 2,230,869 2,147,659 2,230,869 (formerly: Sahaviriya Panich Limited 107,726 107,726 Sahaviriya Plate Mill Public Company International Co., Ltd) 2,147,659 2,230,869 2,147,659 2,230,869 Vanomet AG 31,262 Limited 107,726 107,726 - Sahaviriya Plate Mill Public Company Others 2,437 4,032 Vanomet AG 31,262 - Limited 107,726 107,726 Total 4,564,428 4,570,479 4,547,745 4,529,000 Others 2,437 4,032 Vanomet AG 31,262 Less Totalallowance for doubtful 4,564,428 4,570,479 4,547,745 4,529,000 Others 2,437 4,032 - accounts for doubtful (23,848) (23,848) Less allowance Total 4,564,428 4,570,479 4,547,745 4,529,000 Net accounts 4,540,580 4,570,479 4,523,897 4,529,000 (23,848) (23,848) Less allowance for doubtful Net 4,540,580 4,570,479 4,523,897 4,529,000 accounts (23,848) (23,848) Other receivables from related parties Consolidated Separate Net 4,540,580 4,570,479 4,523,897 4,529,000 financial statements financial statements Other receivables from related parties Consolidated Separate 2015 2014 2015 statements 2014 financial statements financial Other receivables from related parties Consolidated (in thousand Baht) Separate 2015 2014 2015 2014 financial statements financial statements Subsidiaries (in thousand Baht) 2015 2014 2015 2014 Subsidiaries Sahaviriya Steel Industries UK Limited (in thousand Baht) Sahaviriya Steelmaterials Industries UK Limited (mainly is raw Subsidiaries (mainly is raw procured for materials and advance payment Sahaviriya Steel Industries UK Limited procured for and advance payment for purchase of goods) 3,833,974 (mainly is raw materials for purchase of goods) Co., Ltd. ---8,778 3,833,974 West Coast Engineering 12,324 procured for and advance payment West Coast Engineering Co., Ltd. --8,778 12,32446 Prachuap Port Co., Ltd. for purchase of goods) 3,833,974 Prachuap Port Co., Ltd. 46 West Coast Engineering Co., Ltd. 8,778 12,324 Joint venture Prachuap Port Co., Ltd. 46 Joint venture Redcar Bulk Terminal Limited 93,542 Redcar Bulk Terminal 93,542 Thai Rolled SteelLimited Sheet JointCold venture Thai Cold Rolled Steel Sheet Public Company Limited 900 Redcar Bulk Terminal Limited -93,542 -- 900 Public Company Limited 900 900 Thai Cold Rolled Steel Sheet Public Company Limited 900 900

42 42 42


192

Sahaviriya Panich Corporation Co., Ltd. B.S. Metal Co., Ltd. (formerly: Sahaviriya Panich Sahaviriya Panich Corporation Co., Ltd. International Co., Ltd) (formerly: Sahaviriya Panich Sahaviriya Plate Mill Public Company International Co., Ltd) Limited Notes to the Financial Statements Sahaviriya Plate Vanomet AG Mill Public Company Limited Others Vanomet AG Total Others Less allowance for doubtful Totalaccounts Less allowance for doubtful Net accounts Net Other receivables from related parties Other receivables from related parties

Subsidiaries Sahaviriya Steel Industries UK Limited Subsidiaries (mainly is raw materials Sahaviriya Steel Industries Public Sahaviriya Industries Limited procured Steel for and advanceUK payment is raw materials and(mainly its Joint Venture for purchase of goods) procured for and advance payment Notes to Coast the financial statements West Engineering Co., Ltd. for purchase of goods) Prachuap Port Co., Ltd. West Coast Engineering Co., Ltd. Prachuap Port Co., Ltd. Joint venture Other receivables from related parties Redcar Bulk Terminal Limited Joint venture Thai Cold Rolled Steel Sheet Redcar Bulk Terminal Limited Public Company Limited Thai Cold Rolled Steel Sheet Public Company Limited Other related parties Vanomet AG (mainly an advance payment for purchase of goods) Sahaviriya Plate Mill Public Company Limited –net of allowance for doubtful account of Baht 48 million in 2014 and Baht 37 million in 2015 Sahaviriya Shipping UK Line Transport Co., Ltd. Prapawit Building Property B.S. Metal Co., Ltd. Others Total

2,292,481 2,147,659 2,147,659 107,726 107,726 2,437 4,564,428 2,437 4,564,428 (23,848)

2,298,199

2,292,360

2,298,131

2,230,869

2,147,659

4,032 31,262 4,570,479 4,032 4,570,479 -

107,726 4,547,745 4,547,745 (23,848)

2,230,869 -4,529,000 4,529,000 -

2,230,869

2,147,659

Annual Report - 2015 107,726 Sahaviriya Steel Industries Public Company Limited 31,262 -

2,230,869

4,540,580 4,570,479 4,523,897 4,529,000 (23,848) (23,848) Unit: Thousand - Baht 4,540,580 4,570,479 4,523,897 4,529,000 Consolidated Separate Consolidated financial statements Separate financial statements financial statements financial statements 2015 2015 2014 2015 Separate 2014 Consolidated 2014 2015 2014 financial statements financial statements (in thousand Baht) 2015 2014 2015 2014 (in thousand Baht)

Company Limited, its Subsidiaries --Consolidated 93,542 financial statements 2015 2014 -93,542 900 -

900

3,833,974 8,778 12,324 -3,833,974 46 8,778 12,324 46 Separate financial statements2015 2014 -- 900 -

900

267,190

934,440

267,190

245,490

255,908 42 42 101 136 8,757 430 532,522

274,581 1,802 371 208 3,680 893 1,310,417

255,908 8,757 174 540,807

274,581 25 3,680 743 4,371,763

Trade and other receivables as of 31 December 2015 included the gross value of a trade-related balance due from a related company, Sahaviriya Plate Mill Public Company Limited, totaling Baht 411.9 million which is repayable in 36 scheduled installments until December 2018. The Company recovered Baht 42.1 million from January 2015 to December 2015. The Company has considered the slowdown in payment made by the related company and assessed the current status of the related company, and has made allowance for doubtful account of Baht 72.1 million as at 31 December 2015. Accrued income

Subsidiaries West Coast Engineering Co., Ltd. Joint venture Thai Cold Rolled Steel Sheet Public Company Limited Other related parties Sahaviriya Plate Mill Public Company Limited Thai Coated Steel Sheet Co., Ltd. Bangsaphan Barmill Public Company Limited B.S. Metal Co., Ltd. Vanomet AG Others Total

Consolidated Separate financial statements financial statements 2015 2014 2015 2014 (in thousand Baht) -

-

415

493

2,095

1,759

182

264

3,534

130,300 5,587

3,534

130,300 5,587

4,992 607 268 11,496

2,042 264 63,314 184 203,450

4,992 607 9,730

2,042 264 138,950


(mainly anAG advance payment for Vanomet Limited –net of allowance for doubtful purchase goods) 267,190 934,440 267,190 245,490 (mainly anofof advance for account Baht 48payment millionCompany in 2014 and Sahaviriya Plate Mill Public purchase of goods) 267,190 934,440 267,190 245,490 Baht 37 million in 2015 for doubtful 255,908 274,581 255,908 274,581 Limited –net of allowance Sahaviriya Plate Mill Public Company Sahaviriya Shipping UK 1,802 account of Baht 48 millionfor in 2014 and Annual Report 2015 Limited –net of allowance doubtful NotesBaht to the37 Financial Statements 19325 Line Transport Co., Ltd. 101 371 Sahaviriya Steel Industries Public Company Limited million 255,908 274,581 255,908 274,581 account of Baht in 482015 million in 2014 and Prapawit Building Property 136 208 Sahaviriya Shipping 1,802 Baht 37 million inUK 2015 255,908 274,581 255,908 274,581 B.S. Metal Co., Co., Ltd. Ltd. 8,757 3,680 8,757 3,680 Line Transport 101 371 Sahaviriya Shipping UK 1,802 - 25 Others 430 893 174 Prapawit Building Property 136 208 Line Transport Co., Ltd. 101 371 25743 B.S. Metal Co., Ltd. 8,757 3,680 8,757 3,680 Total 532,522 1,310,417 540,807 4,371,763 Prapawit Building Property 136 208 Others 430 893 174 743 B.S. Metal Co., Ltd. 8,757 3,680 8,757 3,680 Total 532,522 1,310,417 540,807 4,371,763 Trade gross value of a trade-related balance Othersand other receivables as of 31 December 2015 430included the 893 174 743 due from a related company, Sahaviriya Plate Mill Public Company Limited, totaling Baht 411.9 million Total 532,522 1,310,417 540,807 4,371,763 Trade and other receivables of 31 December 2015 included the gross value a trade-related which is repayable in 36 as scheduled installments until December 2018.ofThe Company balance recovered due from a related company, Sahaviriya Plate Mill Public Company Limited, totaling Baht 411.9 million in Baht 42.1 million from January 2015 to December 2015. The Company has considered the slowdown Trade and other receivables as of 31 December 2015 included the gross value of a trade-related balance which is repayable in 36 scheduled installments until December 2018. The Company recovered payment by the relatedSahaviriya company Plate and assessed the Company current status of the related company, and has due frommade a related company, Mill Public Limited, totaling Baht 411.9 million Baht 42.1 2015 to December has considered the slowdown in made forfrom doubtful account ofinstallments Baht 72.1 2015. million asCompany at 31 December 2015. whichallowance is million repayable in January 36 scheduled untilThe December 2018. The Company recovered payment made by the related company and assessed the current status of the related company, and has Baht 42.1 million from January 2015 to December 2015. The Company has considered the slowdown in made allowance doubtful ofand Bahtassessed 72.1 Consolidated million as at 31status December Accrued income Separate payment made byforthe related account company the current of the 2015. related company, has Baht Unit:and Thousand financial financial statements made allowance for doubtful account of Baht 72.1 millionstatements as at 31 December 2015. Consolidated financial statements Separate financial statements Accrued income Consolidated 2015 2014 2015Separate 2014 statements financial statements Accrued income Consolidated Separate financial 2015 2014 2015 2014 (in thousand Baht) 2015 2014 2015 2014 financial statements financial statements Subsidiaries (in thousand Baht) 2015 2014 2015 415 2014 493 West Coast Engineering Co., Ltd. Subsidiaries (in thousand Baht) Joint venture West Coast Engineering Co., Ltd. 415 493 Subsidiaries Thai Cold Rolled Steel Sheet Joint venture West Coast Engineering Co., Ltd. 415 493 Public Company Limited 182 264 2,095 1,759 Thai Rolled Steel Sheet JointCold venture Public Company Limited 182 264 2,095 1,759 Other related parties Thai Cold Rolled Steel Sheet Sahaviriya Plateparties Mill Public Company Public Company Limited 182 264 2,095 1,759 Other related Limited Plate Mill Public Company 130,300 130,300 Sahaviriya Other related parties Thai Coated Steel Sheet Co., Ltd. 5,587 3,534 5,587 -3,534 Limited 130,300 130,300 Sahaviriya Plate Mill Public Company Bangsaphan Barmill Public Company Thai Coated Steel Sheet Co., Ltd. 3,534 5,587 3,534 5,587 Limited 130,300 130,300 Limited 4,992 2,042 4,992 2,042 Bangsaphan Public Thai Coated Barmill Steel Sheet Co.,Company Ltd. 3,534 5,587 3,534 5,587 B.S. Metal Co., Ltd. 607 264 607 264 Limited 4,992 2,042 4,992 2,042 Bangsaphan Barmill Public Company B.S. Metal Co., Ltd. 607 264 607 264 Vanomet AG 63,314 Limited 4,992 2,042 4,992 2,042Vanomet AG 63,314 - Others 268 184 B.S. Metal Co., Ltd. 607 264 607 264 Others 268 184 Total 11,496 203,450 9,730 138,950 Vanomet AG 63,314 -Total 11,496 203,450 9,730 138,950 Others 268 184 Total 11,496 203,450 9,730 138,950

43 43 43


194

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes to the Financial Statements

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its JointSteel Venture Sahaviriya Industries Public Sahaviriya Steel Industries Public Company Company Limited, Limited, its its Subsidiaries Subsidiaries Notes to Joint the financial statements and its Venture and its JointSteel Venture Sahaviriya Industries Public Company Limited, its Subsidiaries Notes to the financial statements Notes to the financial statements Unit: Thousand Baht and its Joint Venture d Separate ConsolidatedConsolidate financial statements Separate financial statements financial statements financial statements Long-term other receivable from related party Consolidate d Separate 2015 Consolidate 2014 2015 2014 Long-term other receivable from related party 2015 2014 d 2015Separate 2014 financial statements financial statements financial Consolidate statements financial statements (in thousand Baht) Long-term other receivable from related party d 2015 2014 2015Separate 2014 2015 2014 2015 2014 Subsidiaries financial statements financial statements (in thousand Baht) (in thousand Baht) Sahaviriya Steel Industries UK Limited 630,756 2015 2014 2015 2014 Subsidiaries Subsidiaries Total 630,756 (in- thousand Baht) Sahaviriya Steel Industries UK Limited 630,756 Sahaviriya Steelfor Industries Limited 630,756 Less allowance doubtfulUK accounts Subsidiaries Total 630,756 Total 630,756 Net Sahaviriya Steelfor Industries Limited 630,756 Less allowance doubtfulUK accounts Less allowance for doubtful accounts ---Total 630,756 Net 630,756 Net Less for doubtful accounts - Separate 630,756 Tradeallowance accounts payable to related parties Consolidated Unit: Thousand Baht financial statements financial statements Net Trade accounts payable to related parties Consolidated Separate 630,756 Consolidated financial statements Separate financial statements Trade accounts payable to related parties Consolidated Separate 2015 2014 2015 2014 financial statements financial statements financial statements financial statements (in thousand Baht) Trade accounts payable to related parties Consolidated Separate 2014 2014 2015 2015 2015 2014 2015 2014 2015 2014 2015 2014 Subsidiaries financial statements financial statements (in thousand Baht) West Coast Engineering Co., Ltd. 13,194 (in- thousand Baht) 2015 2014 2015 2014 Subsidiaries Prachuap Port Co., Ltd. 38,738 83,640 Subsidiaries (in- thousand Baht)West Coast Engineering Co., Ltd. 13,194 Sahaviriya Steel Industries UK Limited 1,184,318 West Coast Engineering Co., Ltd. 13,194 Subsidiaries Prachuap Port Co., Ltd. 38,738 83,640 Prachuap Port Co., Ltd. 38,738 83,640 West Engineering Co., Ltd. 13,194 Sahaviriya Steel Industries UK Limited 1,184,318 OtherCoast related parties Sahaviriya Steel Industries UK Limited 1,184,318 Prachuap Port Co., Ltd. 38,738 83,640 Vanomet AG 24,436 744,795 24,436 744,795 Other related parties Sahaviriya Steelparties Industries 1,184,318 Line Transport Co., Ltd. UK Limited 60,739 48,849 60,739 48,841 Other related Vanomet AG 24,436 744,795 24,436 744,795 B.S. Metal Co., Ltd. 264 503 264 503 Vanomet AG 24,436 744,795 24,436 744,795 Other related parties Line Transport Co., Ltd. 60,739 48,849 60,739 48,841 Bangpakong Lighter Co., Ltd. 2,910 11,114 2,910 11,114 Line Transport Co., Ltd. 60,739 48,849 60,739 48,841 Vanomet 24,436 744,795 24,436 744,795 B.S. MetalAG Co., Ltd. 264 503 264 503 Others 92 5,720 40 -503 B.S. Metal Co., Ltd.Ltd. 264 503 264 Line Transport Co., 60,739 48,849 60,739 48,841 Bangpakong Lighter Co., Ltd. 2,910 11,114 2,910 11,114 Bangpakong Lighter 2,910 11,114 2,910 11,114 Total 88,441 810,981 127,127 2,086,405 B.S. Metal Co., Ltd. Co., Ltd. 264 503 264 Others 92 5,720 40 -503 Others 92 5,720 40 Bangpakong Lighter Co., Ltd. 2,910 11,114 2,910 11,114 Total 88,441 810,981 127,127 2,086,405 Total 88,441 810,981 127,127 2,086,405 Other payables to related parties Consolidated Separate Others 92 5,720 40 financial statements financial statements Total payables to related parties 88,441 810,981 127,127 2,086,405 Other Consolidated Separate Other payables to related parties Consolidated2014 Separate 2014 2015 2015 financial statements financial statements financial statements financial statements (in thousand Baht) Other payables to related parties Consolidated2014 2015 2015 Separate 2014 2015 2014 2015 2014 Subsidiaries financial statements financial statements (in thousand Baht) (in thousand Baht) 6,160 Prachuap Port Co., Ltd. 14,961 2015 2014 2015 2014 Subsidiaries Subsidiaries 188 West Coast Engineering Co., Ltd. 267 (in- thousand Baht) 6,160 Prachuap Port Co., Ltd. 14,961 6,160 Prachuap Port Co., Ltd. 14,961 Subsidiaries 188 West Coast Engineering Co., Ltd. 267 188 West Coast Engineering --267 Joint venture 6,160 Prachuap Port Co., Ltd. Co., Ltd. 14,961 Redcar BulkEngineering Terminal Limited -198,335 - 267 -188 West Co., Ltd. Joint Coast venture Joint venture Thai Cold Rolled Steel Sheet Redcar Bulk Terminal Limited 198,335 Redcar Bulk Terminal Limited - 72 198,335 - 72 - 65 Public Company Limited 65 Joint venture Thai Cold Rolled Steel Sheet Thai Cold Rolled Steel Sheet Redcar Bulk Terminal Limited - 72 198,335 - 72 - 65 Public Company Limited 65 65 Public Company Limited 72 65 72 Other related parties Thai Cold Rolled Steel Sheet 1,478 Vamomet AG parties - 72 34,441 - 72 65 Public Company Limited 65 Other related Other related parties Line Transport Co., Ltd. 11,560 14,980 11,560 14,980 1,478 Vamomet AG 34,441 1,478 Vamomet AGLighter 34,441 Bangpakong Co., Ltd. 2,757 8,801 2,757 8,801 Other related parties Line Transport Co., Ltd. 11,560 14,980 11,560 14,980 Line Transport Co., Ltd. 11,560 14,980 11,560 14,980 Bangpakong Port Co., Ltd. 241 1,315 241 1,315 1,478 Vamomet AGLighter Co., Ltd. 34,441 Bangpakong 2,757 8,801 2,757 8,801 Bangpakong Lighter Co., Ltd. 2,757 8,801 2,757 8,801 Prapawit Building Property Co., Ltd. 781 1,508 410 1,244 Line Transport Co., Ltd. 11,560 14,980 11,560 14,980 Bangpakong Port Co., Ltd. 241 1,315 241 1,315 Bangpakong Port Co., Ltd. 241 1,315 241 1,315 Sahaviriya Shipping UK 613,380 Bangpakong Lighter Co., Ltd. 2,757 8,801 2,757 8,801 Prapawit Building Property Co., Ltd. 781 1,508 410 1,244 Prapawit Building Property Co., Ltd. 781 1,508 410 1,244 Thai Steel Sales Co., Ltd. 5,698 5,698 -Bangpakong Port Co., Ltd. 1,315 1,315 Sahaviriya Shipping UK -241 613,380 - 241 Sahaviriya Shipping UK 613,380 -670 Others 727 16,757 719 Prapawit Property 781 1,508 410 1,244 Thai SteelBuilding Sales Co., Ltd. Co., Ltd. 5,698 5,698 Thai Steel Sales Co., Ltd. 5,698 5,698 -Total 21,836 889,582 36,685 34,901 Sahaviriya Shipping UK -727 613,380 - 719 670 Others 16,757 Others 727 16,757 719 Thai 5,698 5,698 -670 TotalSteel Sales Co., Ltd. 21,836 889,582 36,685 34,901 Total 21,836 889,582 36,685 34,901 670 Others 727 16,757 719 Total 21,836 889,582 36,685 34,901

Long-term receivable from related party Notes to theother financial statements

44 44 44


Subsidiaries West Coast Engineering Co., Ltd. Subsidiaries Prachuap Port Co., Ltd. West Coast Steel Engineering Co., Ltd. Sahaviriya Industries UK Limited Prachuap Port Co., Ltd. Other related Sahaviriya Steelparties Industries UK Limited Notes to the Financial Statements Vanomet AG Other related parties Line Transport Co., Ltd. Vanomet B.S. MetalAG Co., Ltd. Line Transport Co., Ltd. Bangpakong Lighter Co., Ltd. B.S. Metal Co., Ltd. Others Bangpakong Lighter Co., Ltd. Total Others Total Other payables to related parties Other payables to related parties Subsidiaries Prachuap Port Co., Ltd. Subsidiaries West Coast Engineering Co., Ltd. Prachuap Port Co., Ltd. West Coast Engineering Co., Ltd. Joint venture Redcar Bulk Terminal Limited Joint venture Thai Cold Rolled Steel Sheet Redcar Bulk Terminal Limited Public Company Limited Thai Cold Rolled Steel Sheet Public Company Limited Other related parties Vamomet AG Other related parties Line Transport Co., Ltd. Vamomet AG Bangpakong Lighter Co., Ltd. Line Transport Co., Ltd. Bangpakong Port Co., Ltd. Bangpakong Lighter Co., Ltd. Prapawit Building Property Co., Ltd. Bangpakong Port Co., Ltd. Sahaviriya Shipping UK Prapawit Building Property Co., Ltd. Sahaviriya Steel Industries Public Thai Steel Sales Co., Ltd. Sahaviriya Shipping UK Others and itsSteel Joint Venture Sahaviriya Steel Public Thai Sales Co.,Industries Ltd. Total Notes to the financial statements Others and its Joint Venture Total Notes to the financial statements Short-term loans from related parties Short-term loans from related parties

(in- thousand Baht)13,194 38,738 83,640 ---13,194 1,184,318 38,738 83,640 Annual Report 2015 1,184,318 195 Sahaviriya Steel Industries Public Company Limited 24,436 744,795 24,436 744,795 60,739 48,849 60,739 48,841 24,436 744,795 24,436 744,795 264 503 264 503 60,739 48,849 60,739 48,841 2,910 11,114 2,910 11,114 264 503 264 92 5,720 40 -503 2,910 11,114 2,910 11,114 88,441 810,981 127,127 2,086,405 92 5,720 40 - Baht Unit: Thousand 88,441 810,981 127,127 2,086,405 Consolidated Separate Consolidated financial statements Separate financial statements financial statements financial statements Consolidated Separate 2014 2015 2015 2014 2015 2014 2015 2014 financial statements financial statements (in thousand Baht) 2015 2014 2015 2014 (in thousand Baht) 6,160 14,961 188 267 6,160 14,961 188 267 -

198,335

-

72

198,335 65

-

72

65

11,560 2,757 11,560 241 2,757 781 241 781 Company 5,698 727 Company 5,698 21,836 727 21,836

34,441 14,980 34,441 8,801 14,980 1,315 8,801 1,508 1,315 613,380 1,508 Limited, - its 613,380 16,757 Limited, - its 889,582 16,757 889,582

72 72

11,560 2,757 11,560 241 2,757 410 241 410 Subsidiaries 5,698 719 Subsidiaries 5,698 36,685 719 36,685

- 65 65 1,478 14,980 1,478 8,801 14,980 1,315 8,801 1,244 1,315 1,244 670 34,901 670

34,901 Unit: Thousand Baht Consolidated Consolidated financial statements Separate Separate financial statements financial statements financial statements Consolidated 2015 2015 2014 2015 Separate 2014 2014 2015 2014 44 financial statements financial statements (in thousand Baht) 2015 2014 2015 2014 44 (in thousand Baht) 8,000 28,000

Subsidiaries Prachuap Port Co., Ltd. Subsidiaries Prachuap Port Co., Ltd. 8,000 Other related parties Vanomet AG 382,834 Other related parties Bangpakong Lighter Co., Ltd. 13,460 Vanomet AG 382,834 The Company’s director 637,000 637,000 Bangpakong Lighter Co., Ltd. 13,460 Total 637,000 396,294 645,000 The Company’s director 637,000 637,000 Total 637,000 396,294 645,000 Movements during the period on short-term loans from related parties were as follows:

28,000

13,460 13,460 41,460 41,460

Movements during the period on short-term loans from related parties were as follows: Consolidated Separate financial statements financial statements Consolidated Separate 2015 2014 2015 2014 financial statements financial statements (in thousand Baht) 2015 2014 2015 2014 Subsidiaries (in thousand Baht) At 1 January 28,000 Subsidiaries Increase 103,000 At 1 January 28,000 Decrease (20,000) (75,000) Increase 103,000 At 31 December 8,000 28,000 Decrease (20,000) (75,000) At 31 December 8,000 28,000 Joint venture and other related parties At 1 January 396,294 13,460 Joint venture and other related parties Increase 917,000 547,368 917,000 136,460 At 1 January 396,294 13,460 Decrease (676,294) (151,074) (293,460) (123,000) Increase 917,000 547,368 917,000 136,460 At 31 December 637,000 396,294 637,000 13,460 Decrease (676,294) (151,074) (293,460) (123,000)


Subsidiaries Subsidiaries Prachuap Port Co., Ltd. Prachuap Port Co., Ltd. Notes to the Financial Statements 196 Other related parties Other related Vanomet AG parties Vanomet AG Bangpakong Lighter Co., Ltd. Bangpakong Lighter Co., Ltd. The Company’s director The Company’s director Total Total

2015 -

-

-637,000 637,000 637,000 637,000

2014 2015 (in thousand Baht) (in thousand Baht) -

-

8,000 8,000

28,000 28,000

-637,000 637,000 645,000 645,000

13,460 13,460 41,460 41,460

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

382,834 382,834 13,460 13,460 396,294 396,294

2014

Movements during the period on short-term loans from related parties were as follows: Movements during the period on short-term loans from related parties were as follows:

Subsidiaries Subsidiaries At 1 January At 1 January Increase Increase Decrease Decrease At 31 December At 31 December

Joint venture and other related parties Joint venture and other related parties At 1 January At 1 January Increase Increase Decrease Decrease At 31 December At 31 December

Unit: Thousand Baht Consolidated Separate Consolidated Separate Consolidated financial statements Separate financial statements financial statements financial statements financial statements financial statements 2015 2014 2015 2014 2015 2015 2014 2015 2014 2014 2015 2014 (in thousand Baht) (in thousand Baht) ---

396,294 396,294 917,000 917,000 (676,294) (676,294) 637,000 637,000

---

547,368 547,368 (151,074) (151,074) 396,294 396,294

28,000 28,000 (20,000) (20,000) 8,000 8,000

103,000 103,000 (75,000) (75,000) 28,000 28,000

13,460 13,460 917,000 917,000 (293,460) (293,460) 637,000 637,000

136,460 136,460 (123,000) (123,000) 13,460 13,460

As at 31 December 2015, interest rate of the Company’s short-term loans from related parties are based Asagreed at 31 December interest rate of therate Company’s short-term loans from related parties are based on rate, which2015, approximates a market and unsecured. on agreed rate, which approximates a market rate and unsecured. In July 2015, the Board of Directors of the Company approved to borrow an interest-free short-term loan July1,700 2015,million the Board of aDirectors of improve the Company approved to borrow an interest-free short-term loan ofInBaht from director to the Group’s liquidity of which approximately Baht 637 of Baht 1,700 million from a director to improve the Group’s liquidity of which approximately Baht 637 million has been borrowed as at 31 December 2015. million has been borrowed as at 31 December 2015. Significant agreements with related parties Significant agreements with related parties Consortium agreement Consortium agreement

On 20 January 2015 a subsidiary has entered into a consortium agreement with a local company in order 20 January 2015 a subsidiary into a consortium agreement with a local company in order toOn jointly-operate for projects fromhas theentered State Railway of Thailand. to jointly-operate for projects from the State Railway of Thailand.

45 45


Notes to the Financial Statements

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Sahaviriya Industries Public Company Limited, its Subsidiaries and its Joint Steel Venture Notes to the financial statementsPublic Sahaviriya Steel Industries PublicCompany CompanyLimited, Limited,its itsSubsidiaries Subsidiaries and its Joint Venture Sahaviriya Steel Industries Notes toJoint the financial statements andits its Joint Venture and Venture Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Notes to the financial statements Notes its to the financial statements Joint Venture 5and Cash and cash equivalents Notes to the statements 5 Cash andfinancial cash equivalents Cashand andcash cashequivalents equivalents 55 Cash

197

Consolidated SeparateUnit: Thousand Baht financial statements financial statements Consolidated Consolidated financial statements SeparateSeparate financial statements 2015 2014 2015 2014 5 Cash and cash equivalents financial statements financial statements Consolidated Separate Consolidated Separate 2014 2015 2014 2015 2014 (in thousand Baht) 2015 2014 2015 financial statements financial statements financial statements financial statements Cash on hand 698 2,659 600Separate 600 Consolidated (in thousand 2015 Baht) 2015 2014 2014 2015 2014 2015 2014 Cash at banks 155,811 348,742 43,937 10,078 financial statements financial Cash on hand 698 2,659 600 statements 600 (in thousand Baht) (in thousand Baht) Total 156,509 351,401 44,537 10,678 2015 2014 2015 2014 Cash on at banks 155,811 348,742 43,937 10,078 Cash hand 698 2,659 600 600 Cash on hand 698 2,659 600 600 (in thousand Baht) Totalat banks 156,509 351,401 44,537 10,678 Cash 155,811 348,742 43,937 10,078 Cash aton banks 155,811 348,742 43,937 10,078 Cash handdenomination of cash and cash equivalents 698as at 31 2,659 600 600 The currency December was as44,537 follows: Total 156,509 351,401 10,678 Total 156,509 351,401 44,537 10,678 Cash at banks 155,811 348,742 43,937 10,078 The currency denomination of cash and cash equivalents as at 31 December was as follows: Total 156,509 351,401 44,537 Consolidated Separate 10,678 Thecurrency currencydenomination denominationofofcash cashand andcash cashequivalents equivalents asatat3131December Decemberwas wasasasfollows: follows: The as financial statements financial statements Consolidated Separate Unit: Thousand Baht The currency denomination of cash and cash equivalents as at 31 December was as follows: 2015 2014 2015 2014 financial statements financial statements Consolidated Separate Consolidated financial statements Separate financial statements Consolidated Separate (in thousand Baht) 2015 2014 2015 2014 financial statements financialstatements statements financial statements financial Thai Baht 156,509 186,437 44,537 10,678 2015 2014 2015 Separate 2014 Consolidated (in thousand Baht) 2015 2014 2015 2014 2015 2014 2015 2014 United States Dollars 161,464 financial statements financial statements Thai Baht 156,509 186,437 44,537 10,678 (inthousand thousandBaht) Baht) (in Pound Sterling -3,102 --2014 2015 2014 2015 United States Dollars 161,464 Thai Baht 156,509 186,437 44,537 10,678 Thai Baht 156,509 186,437 44,537 10,678 Euro 398 - -(in thousand Baht) Pound Sterling 3,102 United States Dollars 161,464 United States Dollars -161,464 --Total 156,509 351,401 44,537 10,678 Thai 156,509 186,437 44,537 10,678 Euro Baht 398 Pound Sterling 3,102 Pound Sterling 3,102 - -United -161,464 -Total States Dollars 156,509 351,401 44,537 10,678 Euro 398 Euro -398 -- -Pound Sterling 3,102 6 Total Trade accounts receivable Total 156,509 351,401 44,537 10,678 156,509 351,401 44,537 10,678 398 6 Euro Trade accounts receivable Total 156,509 351,401 44,537Separate 10,678 Consolidated Tradeaccounts accountsreceivable receivable 66 Trade financial statements financial statements Consolidated Separate 6 Trade accounts receivableNote 2015 2014 2015 2014 financial statements financial statements Consolidated Separate Consolidated Separate (in thousand Baht) Unit: Thousand Note 2015 2014 2015 2014 Baht financial statements financialstatements statements financial statements financial Related parties 4 4,564,428 4,570,479 4,547,745 4,529,000 Consolidated Separate (in thousand Baht) Consolidated financial statements Separate financial statements Note 2015 2014 2015 2014 Note 2015 2014 2015 2014 Other parties 335,492 1,025,939 304,946 325,370 financial statements financial statements Related parties 4 4,564,428 4,570,479 4,547,745 4,529,000 (in thousand Baht) 4,899,920 2015 2014 2015 2014 (in thousand Baht) Note Total 5,596,418 4,852,691 4,854,370 Note 2015 2014 2015 2014 Other parties 335,492 1,025,939 304,946 325,370 Related parties 4 4,564,428 4,570,479 4,547,745 4,529,000 Related parties 4 4,564,428 4,570,479 4,547,745 4,529,000 Less allowance for doubtful (in thousand Baht) Total 4,899,920 5,596,418 4,852,691 4,854,370 Otherparties parties 335,492 1,025,939 304,946 325,370 Other 335,492 1,025,939 304,946 325,370 accounts (309,099) (284,516) (307,657) (283,809) Related parties for doubtful 4 4,564,428 4,570,479 4,547,745 4,529,000 Less allowance Total 4,899,920 5,596,418 4,852,691 4,854,370 Total 4,899,920 5,596,418 4,852,691 4,854,370 Other parties for doubtful 335,492 1,025,939 304,946 325,370 Net 4,590,821 5,311,902 4,545,034 4,570,561 accounts (309,099) (284,516) (307,657) (283,809) Less allowance Less allowance for doubtful Total 4,899,920 5,596,418 4,852,691 4,854,370 Netaccounts 4,590,821 5,311,902 4,545,034 4,570,561 (309,099) (284,516) (307,657) (283,809) accounts (309,099) (284,516) (307,657) (283,809) Less allowance doubtful Bad and doubtfulfor debts Net 4,590,821 5,311,902 4,545,034 4,570,561 Netexpenses 4,590,821 5,311,902 4,545,034 4,570,561 accounts (309,099) (284,516) (307,657) (283,809) for the debts year 24,583 707 23,848 Bad and doubtful Net 4,590,821 5,311,902 4,545,034 4,570,561 for thedebts year 24,583 707 23,848 Badexpenses anddoubtful doubtful Bad and debts expenses for the year 24,583 707 23,848 expenses for thedebts year 24,583 707 23,848 -Bad and doubtful expenses for the year 24,583 707 23,848 -

46 46 4646


198

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes to the Financial Statements

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Sahaviriya Industries Public Company Limited, its Subsidiaries and its JointSteel Venture Notes to the financial statements and its Joint Venture Notes to the financial statements

Aging analyses for trade accounts receivable were as follows: Aging analyses for trade accounts receivable were as follows: Unit: Thousand Baht Consolidated Separate financial statements financial statements Consolidated Separate Consolidated financial statements Separate financial statements 2015 2014 2015 2014 financial statements financial statements 2015 2014 2015 2014 (in thousand Baht) 2015 2014 2015 2014 Related parties (in thousand Baht) Within credit terms 885,738 3,192,194 909,035 3,242,711 Related parties Overdue: Within credit terms 885,738 3,192,194 909,035 3,242,711 Less than 3 months 2,051,620 1,343,645 2,031,843 1,286,289 Overdue: 3-6 months 1,317,029 34,640 1,296,826 Less than 3 months 2,051,620 1,343,645 2,031,843 1,286,289 6-12 months 202,315 202,315 -3-6 months 1,317,029 34,640 1,296,826 Over 12 months 107,726 107,726 6-12 months 202,315 202,315 4,564,428 4,570,479 4,547,745 4,529,000 Over 12 months 107,726 107,726 Less allowance for doubtful accounts (23,848) (23,848) 4,564,428 4,570,479 4,547,745 4,529,000 4,540,580 4,570,479 4,523,897 4,529,000 Less allowance for doubtful accounts (23,848) (23,848) Other parties 4,540,580 4,570,479 4,523,897 4,529,000 Within 42,233 702,802 20,180 39,379 Other credit partiesterms Overdue: Within credit terms 42,233 702,802 20,180 39,379 Less than 3 months 6,468 35,029 957 2,182 Overdue: 3-6 months 1,093 Less than 3 months 6,468 35,029 957 2,182 6-12 months 2,087 2,211 3-6 months 1,093 Over months 284,704 284,804 283,809 283,809 6-12 12 months 2,087 2,211 335,492 1,025,939 304,946 325,370 Over 12 months 284,704 284,804 283,809 283,809 Less allowance for doubtful accounts (285,251) (284,516) (283,809) (283,809) 335,492 1,025,939 304,946 325,370 50,241 741,423 21,137 41,561 Less allowance for doubtful accounts (285,251) (284,516) (283,809) (283,809) Net 4,590,821 5,311,902 4,545,034 4,570,561 50,241 741,423 21,137 41,561 Net 4,590,821 5,311,902 4,545,034 4,570,561 Subsequently in January 2016, Baht 372 million has been collected from trade debtor of two related companies which had aged2016, over 4Baht – 12372 months. Subsequently in January million has been collected from trade debtor of two related companies which had aged over 4 – 12 months. The normal credit terms granted by the Group ranges from 5 to 90 days. The normal credit terms granted by the Group ranges from 5 to 90 days.

47 47


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes to the Financial Statements

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture Sahaviriya Steel Industries Public Company Limited, Subsidiaries Sahaviriya Steel Industries Public Company Limited, its its Subsidiaries Notes to the financial statements and Joint Venture and its its Joint Venture Sahaviriya Steel Industries Notes to the financial statementsPublic Company Limited, its Subsidiaries Notes to the financial statements and its Joint Venture

The to currency denomination of trade accounts receivable as at 31 December was as follows: Notes the financial statements

199

The currency denomination of trade accounts receivable as at 31 December was as follows: The currency denomination of trade accounts receivable as at 31 December was as follows: Consolidated Separate Unit: Thousand Baht financial statements financial statements Consolidated Separate Consolidated financial Separate financial statements The currency denomination of trade accounts receivable as at 31statements December was as follows: Consolidated Separate 2015 2014 2015 2014 financial statements financial statements statements(in financial statements2014 financial 2015 2014 2015 thousand Baht) 2015Consolidated2014 2015 Separate 2014 2015 2014 2015 2014 Thai Baht 4,896,788 4,887,950 4,825,567 (in thousand 4,852,691 Baht) financial statements financial statements (in thousand Baht) United States Dollars 1,496 439,614 28,803 Thai Baht 4,896,788 4,887,950 4,852,691 4,825,567 2015 2014 2015 2014 Thai Baht 4,896,788 4,887,950 4,852,691 4,825,567 Pound 547 180,666 UnitedSterling States Dollars 1,496 439,614 28,803 (in thousand Baht) United States Dollars 1,496627 439,614 - 28,803 Euro 83,857 -Pound Sterling 547 180,666 ThaiSterling Baht 4,896,788 4,887,950 4,852,691 4,825,567 Pound 547462 180,666 - - Australian Dollars 4,331 Euro 627 83,857 United States Dollars 1,496 439,614 Euro 627 83,857 -28,803 Total 4,899,920 5,596,418 4,852,691 4,854,370 Australian Dollars 462 4,331 Pound Sterling 180,666 Australian Dollars 462547 4,331 Total 4,899,920 5,596,418 4,852,691 4,854,370 Euro 83,857 4,852,691Total 4,899,920627 5,596,418 4,854,3707 Australian Inventories Dollars 462 4,331 4,899,920 5,596,418 4,852,691 4,854,370 7 Total Inventories 7 Inventories Consolidated Separate financial statements financial statements 7 Inventories Consolidated Separate Consolidated 2014 SeparateUnit: Thousand Note 2015 2015 2014 Baht financial statements financial statements financial statements(in thousand financial statements Baht) Note Consolidated 2015 2014 2015 Separate 2014 financial statements 2015 Separate financial2014 statements Consolidated Note 2015 2014 Finished goods 1,428,948 3,095,912 1,428,948 3,103,128 (in thousand Baht) financial statements financial statements (in 2014 thousand Note 1,428,948 2015 2015 2014 Work in progress 4,496 65,355 Baht)1,428,948 Finished goods 3,095,912 3,103,128 Note 2015 2014 2015 2014 Finished goods 1,428,948 3,095,912 1,428,948 3,103,128 Raw materials 188,478 4,330,061 189,028 1,764,714 Work in progress 4,496 65,355 (in thousand Baht) Work in parts progress 4,496 65,355 Spare and factory supplies 1,318,939 2,446,264 1,313,636 1,351,139 Raw materials 188,478 4,330,061 189,028 1,764,714 Finished goods 1,428,948 3,095,912 1,428,948 3,103,128 Raw materialsunder collateral 188,478 4,330,061 189,028 1,764,714 Inventories Spare in parts and factory supplies 1,318,939 2,446,264 1,313,636 1,351,139 Work progress 4,496 65,355 1,313,636 Spare parts and factory supplies 1,318,939 2,446,264 1,351,139 management agreement 16 1,014,476 2,053,902 1,014,476 2,053,902 Inventories under collateral Raw materials 188,478 4,330,061 189,028 1,764,714 Inventories under collateral Goods in transit 353,272 2,574,009 353,272 2,574,009 management 16 1,014,476 2,053,902 1,014,476 2,053,902 Spare parts andagreement factory supplies 1,318,939 2,446,264 1,313,636 1,351,139 management agreement 16 1,014,476 2,053,902 1,014,476 2,053,902 4,308,609 14,565,503 4,299,360 10,846,892 Goods in transit 353,272 2,574,009 353,272 2,574,009 Inventories under collateral Goods in transit for decline in value 353,272 2,574,009 353,272 2,574,009 Less allowance (825,266) (936,811) (825,170) (709,474) 4,308,609 14,565,503 4,299,360 10,846,892 management agreement 16 4,308,609 1,014,476 2,053,902 1,014,476 2,053,902 14,565,503 4,299,360 10,846,892 Net 3,483,343 13,628,692 3,474,190 10,137,418 Less allowance for decline in value (825,266) (936,811) (825,170) (709,474) in transit 353,272 2,574,009 353,272 2,574,009 LessGoods allowance for decline in value (825,266) (936,811 ) (825,170) (709,474) Net 3,483,343 13,628,692 3,474,190 10,137,418 4,308,609 14,565,503 4,299,360 10,846,892 Net 3,483,343 13,628,692 3,474,190 10,137,418 Carrying value offorinventories Less allowance decline in subject value (825,266) (936,811) (825,170) (709,474) to retention of of titleinventories clauses or subject Carrying value Net 3,483,343 13,628,692 3,474,190 10,137,418 Carrying valuepledged of inventories subject otherwise secure to retention of titletoclauses or to liabilities retention of title clauses or 1,995,942 8,798,274 1,992,092 6,402,029 otherwise pledged to secure subject Carrying value of inventories otherwise pledged to secure liabilities 1,995,942 8,798,274 1,992,092 6,402,029 to retention of title clauses or liabilities 1,995,942 8,798,274 1,992,092 6,402,029 Inventories an expenses otherwiserecognised pledged toassecure inliabilities ‘cost of sales of goods’: 1,995,942 8,798,274 1,992,092 6,402,029 Inventories recognised as an expenses Inventories recognised as an expenses 18,849,957 29,689,800 18,690,958 29,788,871 - Cost in ‘cost of sales of goods’: in ‘cost of salestoofnet goods’: 454,151 454,151 - -Inventories Write-down realisable value 18,849,957 29,689,800 18,690,958 29,788,871 Cost recognised as an expenses 18,849,957 29,689,800 18,690,958 29,788,871 - Cost - - Reversal of write-down (239,139) (239,139) 454,151 454,151 Write-down to net value in ‘cost oftosales of realisable goods’:value 454,151 454,151 - Write-down net realisable 2(e) - - Loss from discontinued operations 354,835 354,835 -Reversal of write-down (239,139) (239,139) 18,849,957 29,689,800 18,690,958 29,788,871 Cost of write-down - Reversal (239,139) (239,139) - - Derecognition of allowance for Loss from discontinued operations 354,835 354,835 to net realisable value2(e)2(e) 354,835 - LossWrite-down from discontinued operations -454,151 354,835 -454,151 decline in value Derecognition of following allowance for Reversal of write-down (239,139) (239,139) - Derecognition ofofallowance for liquidation subsidiary (227,241) --decline indiscontinued value following 2(e) -decline Loss from operations 354,835 354,835 in value following Net 18,738,412 30,143,951 18,806,654 30,243,022 liquidation ofofsubsidiary (227,241) -liquidation Derecognition allowance for of subsidiary (227,241) Net decline in value following 18,738,412 30,143,951 18,806,654 30,243,022 Net 18,738,412 30,143,951 18,806,654 30,243,022 liquidation of subsidiary (227,241) Net 18,738,412 30,143,951 18,806,654 30,243,022

48

48 48 48


200

Work in progress Raw materials Spare parts and factory supplies Inventories under collateral Notes to the Financial Statements management agreement Goods in transit Less allowance for decline in value Net

4,496 188,478 1,318,939 16

1,014,476 353,272 4,308,609 (825,266) 3,483,343

65,355 4,330,061 2,446,264

189,028 1,313,636

Annual Report 2015 2,053,902 1,014,476 Sahaviriya Steel Industries Public Company Limited

2,574,009 14,565,503 (936,811) 13,628,692

Carrying value of inventories subject to retention of title clauses or Consolidated financial statements otherwise pledged to secure 2015 2014 Note 1,995,942 liabilities 8,798,274

353,272 4,299,360 (825,170) 3,474,190

8 8

Discontinued operation Discontinued operation

48

Note Note

Note

2,053,902 2,574,009 10,846,892 (709,474) 10,137,418

Unit: Thousand Baht Separate financial statements

2015 1,992,092

Inventories recognised as an expenses in ‘cost of sales of goods’: 18,849,957 29,689,800 18,690,958 - Cost 454,151 - Write-down to net realisable value - Reversal of write-down (239,139) (239,139) - Loss from discontinued operations 2(e) 354,835 354,835 Derecognition of allowance for Sahaviriya Steel Industries Public Company Limited, its Subsidiaries value following Sahaviriya Steel Industries Public Company Limited,-its Subsidiaries and itsdecline Jointin Venture liquidation of subsidiary (227,241) Notes to the financial statements andNet its Joint Venture 18,738,412 30,143,951 18,806,654

Notes to the financial statements

1,764,714 1,351,139

2014 6,402,029

29,788,871 454,151 30,243,022

Consolidated Unit: Thousand Baht financial statements Consolidated Consolidated financial For the period statements Forstatements the year financial from 1 January ended For period For the31 year Forthe the period For year to 2 October December from ended31 from 1 January ended 1toJanuary to 31 December 2014 22015 October December 2 October 2015 2014 (in thousand Baht) 2015 2014 (in thousand Baht) 17,504,383 46,808,987 (26,372,051) (51,204,826) 17,504,383 46,808,987 (8,867,668) (4,395,839) (26,372,051) (51,204,826) (8,867,668) (4,395,839) (8,867,668) (4,395,839) (29,168,949) (8,867,668) (4,395,839) (38,036,617) (29,168,949) (4,395,839) (38,036,617) (4,395,839)

Results of discontinued operation Revenue Results of discontinued operation Expenses Revenue Results from operating activities Expenses Income Resultstax from operating activities Results Incomefrom tax operating activities, net of income tax 2(e) Loss on derecognition of SSI UK following liquidation Results from operating activities, net of income tax Loss year 2(e) Lossfor on the derecognition of SSI UK following liquidation Loss for the year Loss per share (in Baht) Basic per share (1.18) (0.14) Loss loss per share (in Baht) Diluted lossper pershare share (1.18) (0.14) Basic loss (1.18) (0.14) Diluted loss per share (1.18) (0.14) The loss from discontinued operation of Baht 38,037 million (2014: Baht 4,396 million) is attributable entirely the owners of theoperation Company.ofOf the38,037 loss from continuing Baht 2,860 million The losstofrom discontinued Baht million (2014: operations Baht 4,396 of million) is attributable (2014: Baht 471 million), an amount of Baht 40,840 million is attributable to the owners the entirely to the owners of the Company. Of the loss from continuing operations of Baht 2,860 of million Company (2014: Baht 4,903 million). (2014: Baht 471 million), an amount of Baht 40,840 million is attributable to the owners of the Company (2014: Baht 4,903 million). Consolidated financial statements Consolidated For the period For the year financial statements from 1 January ended For the period For the31 year to 2 October December from 1 January ended 31 2014 to 22015 October December (in thousand Baht) 2015 2014 Cash flows from (used in) discontinued operation (in thousand Baht) Net cash fromfrom operating 1,403,263 824,575 Cash flows (usedactivities in) discontinued operation Net cash used in investing activities (1,311,962) 165,744 Net cash from operating activities 1,403,263 824,575 Net cash used in financing activities (256,266) (853,182) Net cash used in investing activities (1,311,962) 165,744 Net operation (164,965) (137,137) Netcash cash used used in in discontinued financing activities (256,266) (853,182) Net cash used in discontinued operation (164,965) (137,137)


Revenue Revenue 17,504,383 17,504,383 46,808,987 46,808,987 Results from operating activities (8,867,668) (51,204,826) (4,395,839) Expenses Expenses (26,372,051) (26,372,051) (51,204,826) Income tax Results Results from from operating operating activities activities (8,867,668) (8,867,668) (4,395,839) (4,395,839) Results from operating activities, net of income tax (8,867,668) (4,395,839) Income Income tax tax --Loss on from derecognition of activities, SSI UK following liquidation (29,168,949) Results Results from operating operating activities, net net of of income income tax taxReport 2015 2(e) (8,867,668) (8,867,668) (4,395,839) (4,395,839) Annual Notes to the Financial Statements 201 Loss for the year (38,036,617) (4,395,839) 2(e) 2(e) Sahaviriya Steel Industries Public Company Limited (29,168,949) Loss Loss on on derecognition derecognition of of SSI SSI UK UK following following liquidation liquidation (29,168,949) -Loss Loss for for the the year year (38,036,617) (38,036,617) (4,395,839) (4,395,839) Loss per share (in Baht) Basic lossshare per share (1.18) (0.14) Loss Loss per per share (in (in Baht) Baht) Diluted loss per share Basic Basic loss loss per per share share (1.18) (1.18) (0.14) (0.14) Diluted Diluted loss loss per per share share (1.18) (1.18) (0.14) (0.14) The loss from discontinued operation of Baht 38,037 million (2014: Baht 4,396 million) is attributable entirely the discontinued owners of theoperation Company. the38,037 loss from continuing operations of Baht is 2,860 million The The loss losstofrom from discontinued operation of of Of Baht Baht 38,037 million million (2014: (2014: Baht Baht 4,396 4,396 million) million) is attributable attributable (2014: Baht 471 million), an amount of Baht 40,840 million is attributable to the owners of the entirely entirely to to the the owners owners of of the the Company. Company. Of Of the the loss loss from from continuing continuing operations operations of of Baht Baht 2,860 2,860 million million Company (2014: Baht 4,903 million). (2014: (2014: Baht Baht 471 471 million), million), an an amount amount of of Baht Baht 40,840 40,840 million million isis attributable attributable to to the the owners owners of of the the Company Company (2014: (2014: Baht Baht 4,903 4,903 million). million). Consolidated Unit: Thousand Baht financial statements Consolidated Consolidated Consolidated financialFor statements For the period the year financial financial statements statements from 1 January ended 31 For the period For the For For the the period period For For the theyear year year from ended to 2 October December from from 11 January January ended ended 31 31 1to January to 31 December 2014 to 222015 October October December December 2 October(in 2015 2014 2015 2015 thousand Baht) 2014 2014 Cash flows from (used in) discontinued operation (in (in thousand thousand Baht) Baht) Net cash from operating activities 1,403,263 824,575 Cash Cash flows flows from from (used (used in) in) discontinued discontinued operation operation Net cash used in investing activities (1,311,962) 165,744 Net Net cash cash from from operating operating activities activities 1,403,263 1,403,263 824,575 824,575 Net cash used in financing activities (256,266) (853,182) Net Net cash cash used used in in investing investing activities activities (1,311,962) (1,311,962) 165,744 165,744 Net cash used infinancing discontinued operation (164,965) (137,137) Net Net cash cash used used in in financing activities activities (256,266) (256,266) (853,182) (853,182) Net Net cash cash used used in in discontinued discontinued operation operation (164,965) (164,965) (137,137) (137,137)

49 49 49


202

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes to the Financial Statements

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture Notes to the financial statements

Unit: Thousand Baht Consolidated Consolidated financial statements financial statements 2015 2015 (in thousand Baht)

Effect of disposal on the financial position of the Group Trade accounts receivable Other accounts receivable from related parties Inventories Other current assets Investments in joint venture Property, plant and equipment Intangible assets Bank overdraft and short-term loans from financial institutions and from related parties Trade accounts payables Other accounts payable from related parties Current portion of long-term loans from financial institutions Other current liabilities Environmental liabilities and others Net assets and liabilities

227,239 1,181,187 2,090,000 1,699,616 804,639 35,143,915 79,291 (11,042,869) (4,961,295) (7,911,009) (17,714,117) (6,662,328) (662,630) (7,728,361)

Consideration received, satisfied in cash Cash and cash equivalents disposed of Net cash inflow

9

-

Investments in subsidiaries

Note At 1 January Less Transfers to assets held for disposal following liquidation of subsidiary At 31 December

50

2(e)

Separate financial statements 2015 2014 (in thousand Baht) 27,760,792 27,760,792 (27,481,792) 279,000

27,760,792


9

Otherportion accounts from related Current of payable long-term loans fromparties Current portion of long-term loans from financial institutions institutions Otherfinancial current liabilities Other currentliabilities liabilitiesand others Environmental liabilities Notes to theand Financial Statements and others NetEnvironmental assets liabilities Net assets and liabilities Consideration received, satisfied in cash Consideration received, disposed satisfied of in cash Cash and cash equivalents cash equivalents disposed of NetCash cashand inflow Net cash inflow

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Investments in subsidiaries 9 Investments in subsidiaries

At 1 January AtTransfers 1 Januaryto assets held for disposal following Less Less Transfers to assets held for disposal following liquidation of subsidiary At 31liquidation Decemberof subsidiary At 31 December

50

50

(7,911,009) (17,714,117) (17,714,117) (6,662,328) (6,662,328) (662,630) (662,630) 203 (7,728,361) (7,728,361) - - -

Separate Unit: Thousand Baht financial statements SeparateSeparate financial statements financial statements Note 2015 2014 Note (in 2015 Note 2015 2014 thousand Baht) 2014 (in thousand Baht) 27,760,792 27,760,792 27,760,792 27,760,792 2(e) (27,481,792) 2(e) (27,481,792) 279,000 27,760,792 279,000 27,760,792


Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Annual Report 2015 NotesVenture to the Financial Statements Public Company Limited, its Subsidiaries Sahaviriya Steel Industries Public Company Limited Sahaviriya Steel Industries and its Joint Sahaviriya Sahaviriya Sahaviriya Sahaviriya Steel Steel Steel Steel Industries Industries Industries Industries Public Public Public Public Company Company Company Company Limited, Limited, Limited, Limited, its its its its Subsidiaries Subsidiaries Subsidiaries Subsidiaries Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Notes toits the financial statements and Joint Venture and and and and its its its its Joint Joint Joint Joint Venture Venture Venture Venture Sahaviriya Sahaviriya Steel Steel Industries Industries Public Public Company Company Limited, Limited, its its Subsidiaries Subsidiaries and itsNotes Joint to Venture the financial statements Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Notes Notes Notes Notes Notes to to to to to the the the the the financial financial financial financial financial statements statements statements statements statements and and its its Joint JointSteel Venture Venture Sahaviriya Industries Public Company Limited, its Subsidiaries Notes to the financial statements and its its Joint Venture Sahaviriya Steel Industries Public Company Limited, Subsidiaries Notes Notes to to Joint the the financial financial statements statements Investments in subsidiaries as at 31 December 2015 and 2014, andits dividend income from those investments for the years then ended were as follows: and Venture Notes to the financial statements and its Joint Venture Investments in subsidiaries as at 31 December 2015 and 2014, and dividend income from those investments for the years then ended were as follows: Notes to the financial statements

204

Investments Investments Investments Investments Investments inin in in in subsidiaries subsidiaries subsidiaries subsidiaries subsidiaries as as as as as atat at atat 31 31 31 31 31 December December December December December 2015 2015 2015 2015 2015 and and and and and 2014, 2014, 2014, 2014, 2014, and and and and and dividend dividend dividend dividend dividend income income income income income from from from from from those those those those those investments investments investments investments investments for for for for for the the the the the years years years years years then then then then then ended ended ended ended ended were were were were were as as as as as follows: follows: follows: follows: follows:

financial statements Investments subsidiaries as at 31 December 2015 and 2014, and dividend income fromSeparate those investments for the years then ended were as follows: Notes to theinfinancial statements Separate financial statements

Ownership interest Paid-up capital method Impairment Atended cost - net Dividend income Separate statements Investments Investments in in subsidiaries subsidiaries as as at at 31 31 December December 2015 2015 and and 2014, 2014, and and dividend dividendCost income income from from those thosefinancial investments investments for for the the years years then then ended were were as as follows: follows: Separate Separate Separate Separate Separate financial financial financial financial financial statements statements statements statements statements2014 Type of business 2015 2014 2015 2014 2015 income 2014 2015 2015 2015 2014 Separate financial statements Ownership interest Paid-up capital Cost method Impairment At cost -2014 net as follows: Dividend income Investments in subsidiaries as at 31 December 2015 and 2014, and dividend from those investments for the years then ended were Investments in subsidiaries as atOwnership 31 December 2015Paid-up and 2014, and dividend income from those investments for the years then ended were as follows: Ownership Ownership Ownership Ownership interest interest interest interest interest Paid-up Paid-up Paid-up Paid-up capital capital capital capital capital Cost Cost Cost Cost Cost method method method method method Impairment Impairment Impairment Impairment Impairment At At At At At cost cost cost cost cost ---net -net -net net net Dividend Dividend Dividend Dividend Dividend income income income income income (%) (in thousand Baht) interest 2014 Paid-up capital Impairment - net income Type of business Ownership2015 2015 2014 Cost method 2015 2014financial 2015 2014 At cost 2015 2014 Dividend2015 2014 Separate Separate financial statements statements Investments in subsidiaries 31 December 20152015 and and dividend from for the years2015 then were Type Type Type Type Type ofof of of of business business business business business as at 2015 2015 2015 2015 2015 2014 2014 2014 2014 2014 2015 2015 2015 20152014, 2014 2014 2014 2014 2014 2015 2015 2015 2015 2015income 2014 2014 2014 2014 2014those investments 2015 2015 2015 2015 2015 2014 2014 2014 2014 2014 2015 2015 2015 2015 ended2014 2014 2014 2014 2014 as follows: 2015 2015 2015 2015 2015 2014 2014 2014 2014 2014 Subsidiaries

Type of business 2015Ownership 2014(%) 2015 Paid-up 2014 2014 Separate 2015 2014 Baht)2015 2014 2015 Dividend 2014 (in thousand Ownership interest interest Paid-up capital capital 2015 Cost Costmethod method Impairment Impairment At At cost cost -- net net Dividend income income financialstatements statements Separate (%) (%) (%) (%) (%)2014 (in (in (in (in (in thousand thousand thousand thousand thousand Baht) Baht) Baht) Baht) Baht) Ownership 2015 2015 2014 2015 Cost method 2014 financial 2015 2014 2015 At cost - net 2014 2015 2014 Prachuap Port Type Deep-sea port and (%) (in thousand Baht) 2014 Subsidiaries interest Paid-up capital Impairment Dividend income Typeof ofbusiness business 2015 2015 2014 2014 2015 2015 2014 2014 2015 2015 2014 2014 2015 2015 2014 2015 2015 2014 2014 2015 2015 2014 2014 Separate financial statements Ownership interest Paid-up capital Cost method Impairment At cost - net Dividend income Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Co., Ltd. marine shipping Subsidiaries Prachuap Port Type Deep-sea port and (%) 2014 (in (inImpairment thousand thousand Baht) Baht) ofbusiness business 2015(%) 2014 2015 capital 2014 2015 2014 2015 2014 2015 2014 2015 2014 Ownership Paid-up Cost method2014 At cost - net Dividend income Type of 2015 2015 2014 2015 2015 2014 2015 2014 2015 2014 Prachuap Prachuap Prachuap Prachuap Prachuap Port Port Port Port Port Deep-sea Deep-sea Deep-sea Deep-sea Deep-sea port port port port port and and and and and 51.00 (%)interest 51.00 400,000 400,000 204,000 204,000 - thousand Baht) 204,000 204,000 30,600 45,900 Prachuap Port Deep-seaservices port and shipping Co., Ltd. marine Subsidiaries Subsidiaries (in Type ofshipping business 2015 (%) 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 (in thousand Baht) Co., Co., Co., Co., Co., Ltd. Ltd. Ltd. Ltd. Ltd. marine marine marine marine marine shipping shipping shipping shipping West Coast Maintenance Co., Prachuap Ltd. marine shipping services 51.00 51.00 400,000 400,000 204,000 204,000 204,000 204,000 30,600 45,900 Prachuap Port Port Deep-sea Deep-sea port port and and Subsidiaries (in Subsidiaries services services services services services 51.00 51.00 51.00 51.00 51.00(%) 51.00 51.00 51.00 51.00 51.00 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 204,000 204,000 204,000 204,000 204,000 204,000 204,000 204,000 204,000 204,000 -----thousand Baht) ----204,000 204,000 204,000 204,000 204,000 204,000 204,000 204,000 204,000 204,000 30,600 30,600 30,600 30,600 30,600 45,900 45,900 45,900 45,900 45,900 Engineering services services 51.00 51.00 400,000 400,000 204,000 204,000 204,000 204,000 30,600 45,900 West Coast Maintenance Co., Co., Ltd. Ltd. marine marine shipping shipping Prachuap Port Deep-sea port and Subsidiaries Prachuap Port Maintenance Deep-sea port and West West West West West Coast Coast Coast Coast Coast Maintenance Maintenance Maintenance Maintenance Co., Ltd. 99.99 99.99 400,000 75,000 400,000 75,000 75,000 75,000 75,000 75,000 37,500 West Coast Maintenance Engineering services services services 51.00 51.00 51.00 51.00 400,000 400,000 204,000 204,000 204,000 204,000 ----204,000 204,000 204,000 204,000 30,600 30,600 45,900 45,900 Co., Ltd.Port marine shipping Prachuap Deep-sea port and Co., Ltd. marine shipping Engineering Engineering Engineering Engineering Engineering services services services services services Sahaviriya Steel Integrated iron and GBP Engineering services Co., Ltd. 99.99 99.99 75,000 75,000 75,000 75,000 75,000 75,000 37,500 West West Coast Coast Maintenance Maintenance services 51.00 51.00 400,000 400,000 400,000 400,000 204,000 204,000 204,000 204,000 30,600 45,900 Co., Ltd. shipping services 51.00 51.00 204,000 204,000 204,000 204,000 30,600 45,900 Co., Co., Co., Co., Ltd. Ltd. Ltd. Ltd. UK marine 99.99 99.99 99.99 99.99 99.99 99.99 99.99 99.99 99.99 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 --------75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 ----37,500 37,500 37,500 37,500 37,500 Industries production of and 99.9999.99 Co., Ltd. 99.99 75,000 75,000 557 75,000 75,000 75,000 37,500 Sahaviriya SteelMaintenance Integrated iron GBP 75,000 Engineering Engineering services services West Coast services 51.00 51.00 400,000 204,000 204,000 204,000 204,000 30,600 45,900 West CoastSteel Maintenance Sahaviriya Sahaviriya Sahaviriya Sahaviriya Sahaviriya Steel Steel Steel SteelIntegrated Integrated Integrated Integrated Integrated iron iron iron iron iron and and and and and GBP GBP GBP GBP GBP Limited slab 100.00 - GBP400,000 million 27,481,792 27,481,792 Sahaviriya Steel iron and Industries UK steel production of 557 Co., Co., Ltd. Ltd. Integrated 99.99 99.99 99.99 99.99 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 ----75,000 75,000 75,000 75,000 --37,500 37,500 Engineering services West Coast Maintenance Engineering services Industries Industries Industries Industries Industries UK UK UK UK UK production production production production production ofof of of of 557 557 557 557 557 Total 279,000 27,760,792 279,000 27,760,792 30,600 83,400 Industries UK production of iron Limited steel slab 100.00 75,000 -557 GBP million 27,481,792 27,481,792 Sahaviriya Sahaviriya Steel Integrated Integrated ironand and GBP Co., Ltd.Steel 99.99 99.99 75,000 75,000 75,000 - - 75,000 75,000 - 37,500 Engineering services Co., Ltd. 99.99 99.99 75,000 75,000 75,000 75,000 75,000 37,500 Limited Limited Limited Limited Limited steel steel steel steel steel slab slab slab slab slab ----100.00 100.00 100.00 100.00 100.00 75,000 ----million million million million million ----27,481,792 27,481,792 27,481,792 27,481,792 27,481,792 ------------27,481,792 27,481,792 27,481,792 27,481,792 27,481,792 --------Limited steel Integrated slab 100.00 million 557 27,481,792 27,481,792 Total 279,000 27,760,792 279,000 27,760,792 30,600 83,400 Sahaviriya Steel iron and GBP Industries Industries UK UK production production of of 557 Co., Ltd. 99.99 99.99 except 75,000Sahaviriya 75,000 75,000 75,000 75,000 75,000 37,500 Sahaviriya Integratedwere iron and GBP Steel279,000 Total Total Total Total Total 279,000 279,000 279,000 279,000 27,760,792 27,760,792 27,760,792 27,760,792 27,760,792 ------ was incorporated -----279,000 279,000 279,000 279,000 279,000 27,760,792 27,760,792 27,760,792 27,760,792 27,760,792 30,600 30,600 30,600 30,600 30,600 83,400 83,400 83,400 83,400 83,400 AllSteel subsidiaries incorporated in Thailand, Industries UK Limited which in the United Kingdom. Total Limited 83,400 -Limited steel steel slab slabiron -100.00 100.00 -million million 27,481,792 27,481,792 --- 279,000 -- 27,760,792 27,481,792 27,481,79230,600 -Industries UK Integrated production ofand 557 279,000 -- 27,760,792 Sahaviriya Steel GBP Industries UK production of 557 All subsidiaries were incorporated in Thailand, except Sahaviriya Steel Industries UK Limited which was incorporated in the United Kingdom. Limited steel slab -in 100.00except million 27,481,792 - was -the 27,481,792 Total Total 279,000 279,000 27,760,792 27,760,792 ---279,000 279,000 27,760,792 27,760,792 30,600 30,600 83,400 83,400 See in noteproduction 2 “Current operations”-in to the financial statements for liquidation is Limited in process of---SSI UK. Industries UK ofincorporated 557 All All All All All subsidiaries subsidiaries subsidiaries subsidiaries subsidiaries were were were were were incorporated incorporated incorporated incorporated in in in Thailand, Thailand, Thailand, Thailand, Thailand, except except except except Sahaviriya Sahaviriya Sahaviriya Sahaviriya Steel Steel Steel Steel Industries Industries Industries Industries Industries UK UK UK UK UK Limited Limited Limited Limited which which which which which was was was incorporated incorporated incorporated incorporated incorporated in in in the the the United United United United United Kingdom. Kingdom. Kingdom. Kingdom. Kingdom. Limited steel slab 100.00 -- Sahaviriya million -- which 27,481,792 -the 27,481,792 --All subsidiaries were incorporated in Thailand, except Sahaviriya SteelSteel Industries UK Limited which was- was incorporated in theinin United Kingdom. Total 279,000 27,760,792 279,000 27,760,792 30,600 83,400 Limited See in note steel 2slab - to the 100.00 -statements million 27,481,792 -of SSI UK. 27,481,792 Total 279,000 27,760,792 279,000 27,760,792 30,600 83,400 “Current operations” financial for liquidation which is in process All All subsidiaries subsidiaries were were incorporated incorporated in in Thailand, Thailand, except except Sahaviriya Sahaviriya Steel Steel Industries Industries UK UK Limited Limited which which was was incorporated incorporated in the the United United Kingdom. the recoverable In 2015, the management performed tests of impairment offor certain investments in subsidiary by using value in usein approach to Kingdom. determine See See See See See in in in in in note note note note note 2222“Current 2“Current “Current “Current “Current operations” operations” operations” operations” operations” to to to to to the the the the the financial financial financial financial financial statements statements statements statements statements for for for for liquidation liquidation liquidation liquidation liquidation which which which which which isprocess is is isis inin in in in process process process process process of of of of of SSI SSI SSI SSI SSI UK. UK. UK. UK. UK. Total 279,000 27,760,792 279,000 27,760,792 30,600 83,400 See in note 2 “Current operations” to the financial statements for liquidation which is in of SSI UK. amount of the asset’s value.

AllInsubsidiaries subsidiaries wereincorporated incorporated inThailand, Thailand, except Sahaviriya SteelIndustries Industries UKinLimited Limited which was incorporated inthe theUnited UnitedtoKingdom. Kingdom. 2015, the management performed tests ofexcept impairment of liquidation certain investments subsidiary bywas using value in use approach determine the recoverable All were in Sahaviriya Steel UK which incorporated in See See in in note note 2 2 “Current “Current operations” operations” to to the the financial financial statements statements for for liquidation which which is is in in process process of of SSI SSI UK. UK. In In In In In 2015, 2015, 2015, 2015, 2015, the the the the the management management management management management performed performed performed performed performed tests tests tests tests tests of of of of of impairment impairment impairment impairment impairment of of of of of certain certain certain certain certain investments investments investments investments investments in in in in in subsidiary subsidiary subsidiary subsidiary subsidiary by by by by by using using using using using value value value value value in in in in in use use use use use approach approach approach approach approach to to to to to determine determine determine determine determine the the the the therecoverable recoverable recoverable recoverable recoverable amount of the asset’s value. In 2015, the management performed tests of impairment of certain investments in subsidiary by using value in use approach to determine the recoverable All subsidiaries were incorporated in Thailand, except Sahaviriya Steel Industries UK Limited which was incorporated in the United Kingdom. The key assumptions used to measure thefinancial recoverable amountsforinliquidation 2015 were which as follows: amount amount amount amount amount of of of of of the the the the the asset’s asset’s asset’s asset’s asset’s value. value. value. value. value. See in note 2“Current “Current operations” tothe the statements isin inprocess processof ofSSI SSIUK. UK. amount of the asset’s value. See in note 2 operations” to financial statements for liquidation which is In In 2015, 2015, the theassumptions management management performed performed tests tests ofrecoverable impairment impairmentamounts of of certain certain investments investments in subsidiary subsidiary by by using using value value in in use use approach approach to to determine determine the the recoverable recoverable The key used to measure theof in 2015 were as in follows: See in note 2 “Current operations” to the financial statements for liquidation which is in process ofbySSI UK.value in use approach to determine the recoverable amount amount of of the the asset’s asset’s value. value. The The The The The key key key key key assumptions assumptions assumptions assumptions assumptions used used used used used to to to to to measure measure measure measure measure the the the the the recoverable recoverable recoverable recoverable recoverable amounts amounts amounts amounts amounts in in in in in 2015 2015 2015 2015 2015 were were were were were as as as as as follows: follows: follows: follows: follows: In 2015, the management performed tests of impairment of certain investments in subsidiary using 5 impairment years plusinof terminal value The key assumptions used to measure the recoverable amounts 2015 were as follows:in subsidiary by using value in use approach to determine the recoverable InPeriod 2015, the management performed tests of certain investments amount ofRate theasset’s asset’svalue. value. amount the Discount peryears annum In 2015, the management performed tests of 5impairment of terminal certain in subsidiary by using value in use approach to determine the recoverable Period plus value The The key keyof assumptions assumptions used used to to measure measure the the9.52% recoverable recoverable amounts amounts in in 2015 2015investments were were as as follows: follows: Period Period Period Period Periodof the asset’s value. 5years 5555 years years years years years plus plus plus plus plus terminal terminal terminal terminal terminal value value value value value amount Period 5the recoverable plus terminal value Discount Rate 9.52% per annum The key assumptions used to measure amounts in 2015 were as follows: The key assumptions used to measure the recoverable amounts in 2015 were as follows: Discount Discount Discount Discount Discount Rate Rate Rate Rate Rate 9.52% 9.52% 9.52% 9.52% 9.52% per per per per per annum annum annum annum annum Discount Rateassumptions 9.52% per Period Period 55 annum years years plus plus terminal terminal value value The key used to measure the recoverable amounts in 2015 were as follows: Period 5 years plus terminal value Discount Discount Rate Rate 9.52% 9.52% per per annum annum Period 5 years plus terminal value DiscountRate Rate 9.52% perannum annum Period 5 years plus terminal value Discount 9.52% per Discount Rate 9.52% per annum

51 51 51 51 51 51 51 51 51 51 51 51


West Coast Maintenance Engineering services Co., Ltd. Sahaviriya Steel Integrated iron and Industries production of NotesUK to the Financial Statements Limited steel slab Total

99.99 -

99.99

75,000

75,000 75,000 GBP Annual Report 2015 557 Sahaviriya Steel Industries Public Company Limited 100.00 million 279,000

75,000

-

27,481,792 27,760,792

-

-

205

-

All subsidiaries were incorporated in Thailand, except Sahaviriya Steel Industries UK Limited which was incorpora See in note 2 “Current operations” to the financial statements for liquidation which is in process of SSI UK.

In 2015, 2015, the the management management performed performed tests tests of of impairment impairment of of certain certain investments investments in in subsidiary subsidiary by by using value in u In using value in asset’s use approach amount of the value. to determine the recoverable amount of the asset’s value.

The key assumptions used to measure recoverableLimited, amounts inits 2015 were as follows: Sahaviriya Steel Industries Publicthe Company Subsidiaries andSahaviriya its Joint Venture Steel Industries Public5Company Limited, its Subsidiaries Period years plus terminal value Notes to the statements and its financial Joint Discount Rate Venture 9.52% per annum Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Notes to the financial statements and its Joint Venture In 2015, the management performed tests of impairment of certain investments in subsidiary by using value

10 Notes Non-controlling to the financial statements amount of the interests asset’s value. 10 Non-controlling interests

The following table summarises the information relating to each of the Group’s subsidiaries that aThe material non-controlling interest,the before any intra-group following table summarises information relatingeliminations: to each of the Group’s subsidiaries that 10has Non-controlling interests has a material non-controlling interest, before any intra-group eliminations: 31 December 2015 31 of December 2015 subsidiaries that The following table summarises the information relating to each the Group’s Other 31 December 2015 has a material non-controlling interest, before any intra-group eliminations: 51 individually Other Prachuap Port immaterial Intra-group individually 31 December 2015 Co., Ltd. subsidiaries eliminations Prachuap Port immaterial Intra-group Total Other (in thousand Baht) Co., Ltd. subsidiaries eliminations Total individually Non-controlling interest percentage 49% (in thousand Baht) Prachuap Port immaterial Intra-group Current assets 156,126 Non-controlling interest percentage Co., Ltd.49% subsidiaries eliminations Total Non-current 1,657,630 Current assets assets 156,126 (in thousand Baht) Current liabilities assets (215,513) Non-current 1,657,630 Non-controlling interest percentage 49% Non-current liabilities (98,441) Current liabilities (215,513) Current assets 156,126 NetNon-current assets 1,499,802 Non-currentassets liabilities (98,441) 1,657,630 Carrying amount of non-controlling Net assets 1,499,802 Current liabilities (215,513) interest 734,903 160 (28,356) 706,707 Carrying amount of non-controlling Non-current liabilities (98,441) 734,903 160 (28,356) 706,707 Netinterest assets 1,499,802 Revenue 244,011 Carrying amount of non-controlling ProfitRevenue (127,063) interest 734,903 160 (28,356) 706,707 244,011 OtherProfit comprehensive income (13,090) (127,063) Total comprehensive income (140,153) Revenue 244,011 Other comprehensive income (13,090) Profit allocated to non-controlling Profit (127,063) Total comprehensive income (140,153) interest (62,197) (175) 5,477 (56,895) Other income (13,090) Profitcomprehensive allocated to non-controlling Other comprehensive income interest (62,197) (175) 5,477 (56,895) Total comprehensive income (140,153) allocated to non-controlling interest Otherallocated comprehensive income Profit to non-controlling (6,414) (17) (950) (7,381) interest (62,197) (175) 5,477 allocated to non-controlling interest (56,895) (6,414) (17) (950) (7,381) Other comprehensive income Cash allocated flows from activities 197,802 to operating non-controlling interest CashCash flowsflows used from in investing activities (139,955) (6,414) (17) (950) (7,381) operating activities 197,802 CashCash flowsflows used used in financing activities in investing activities (139,955) (dividends to from non-controlling Cashflows flows usedoperating in financing activities Cash activities 197,802 interest: 29.4 used million) (124,643) (dividends to in non-controlling Cash flows investing activities (139,955) NetCash decrease in cash and cash interest: 29.4 in million) (124,643) flows used financing activities equivalents (66,796) Net decrease cash and cash (dividends to in non-controlling equivalents (66,796) interest: 29.4 million) (124,643) Net decrease in cash and cash equivalents (66,796)


Non-controlling interest percentage Current assets Sahaviriya Steel Industries Public Non-current assets andCurrent its Joint Venture liabilities Notes to the financial Non-current liabilitiesstatements Notes to the Financial Statements 206 Net assets Carrying amount of non-controlling 10 interest Non-controlling interests

49% 156,126 Company Limited, its Subsidiaries 1,657,630 (215,513) (98,441) Annual Report 2015 1,499,802 Sahaviriya Steel Industries Public Company Limited 734,903

160

(28,356)

706,707

The following table summarises the information relating to each of the Group’s subsidiaries that Revenue 244,011 has a material non-controlling interest, before any intra-group eliminations: Profit (127,063) 31 December 2015 Other comprehensive income (13,090) 31 December 2015 Total comprehensive income (140,153) Other Profit allocated to non-controlling individually interest (62,197) (175) 5,477 (56,895) Prachuap Port immaterial Intra-group Other comprehensive income Co., Ltd. subsidiaries eliminations Total allocated to non-controlling interest (in thousand Baht) (6,414) (17) (950) (7,381) Non-controlling interest percentage 49% Current assets 156,126 Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Non-current assets 1,657,630 Cash flows from operating activities 197,802 andCash its flows Joint Venture Current liabilities (215,513) used in investing activities (139,955) Notes to the financial statements Non-current liabilities (98,441) Cash flows used in financing activities Net assets to non-controlling 1,499,802 (dividends interest: 29.4 million) (124,643) Carrying amount of non-controlling interest 734,903 160 (28,356) 706,707 decrease in cashinterests and cash 10 NetNon-controlling equivalents (66,796) Sahaviriya Steel Industries Public Companyrelating Limited, its Subsidiaries The following table summarises the information Revenue 244,011 to each of the Group’s subsidiaries that and itsProfit Joint Venture has a material non-controlling interest, before any intra-group eliminations: (127,063) 31 December 2014 Notes toOther the financial statements comprehensive income (13,090) 31 December 2015 Total comprehensive income (140,153) Other Profit allocated to non-controlling 31 December 2014 5,477 interest (62,197) individually (175) (56,895) Prachuap Port immaterial Intra-group Other Other comprehensive income Co., Ltd. subsidiaries eliminations Total individually allocated to non-controlling interest (in thousand Baht) Prachuap Port immaterial Intra-group (6,414) (17) (950) (7,381) Non-controlling interest percentage 49% subsidiaries eliminations Co., Ltd. Total Current assets 156,126 (in thousand Baht) Cash flows from operating activities 197,802 Non-current assets 1,657,630 Non-controlling interest percentage 49% Cash flows used in investing activities (139,955) Current liabilities (215,513) Current assets 292,716 Cash flows used in financing activities Non-current liabilities (98,441) Non-current assets 1,775,422 (dividends to non-controlling Net assets 1,499,802 Current liabilities (211,463) interest:amount 29.4 million) (124,643) Carrying of non-controlling Non-current liabilities (155,565) 52 Net decrease in cash and cash interest 734,903 160 (28,356) 706,707 Net assets 1,701,110 equivalents (66,796) Carrying amount of non-controlling interest 833,540 409 (33,967) 799,982 Revenue 244,011 Profit (127,063) Revenue 286,334 Other comprehensive income (13,090) Profit 68,643 Total comprehensive income (140,153) Other income (17,020) Profitcomprehensive allocated to non-controlling Total comprehensive income 51,623 interest (62,197) (175) 5,477 (56,895) Profit to non-controlling Otherallocated comprehensive income interest 33,772 (1,199) 3,622 36,195 allocated to non-controlling interest (6,414) (17) (950) (7,381) Other comprehensive income allocated to non-controlling interest (8,340) 14 (354) (8,680) Cash flows from operating activities 197,802 Cash flows used in investing activities (139,955) Cashflows flowsfrom usedoperating in financing activities Cash activities 176,389 (dividends to non-controlling Cash flows used in investing activities (39,300) interest: 29.4 in million) (124,643) Cash flows used financing activities 52 Net decrease cash and cashinterest: (dividends to in non-controlling equivalents (66,796) 44.1 million) (2,483) Net increase in cash and cash equivalents 134,606

11

Investments in joint venture


Non-controlling interest percentage 49% Non-controlling interest percentage 49% Current assets 292,716 Sahaviriya Steel Industries Public Company Current assets 292,716Limited, its Subsidiaries Non-current assets 1,775,422 andNon-current its Joint Venture assets 1,775,422 Current liabilities (211,463) Notes to the financial statements Current liabilities (211,463) Non-current liabilities (155,565) Annual Report 2015 Notes to assets the Financialliabilities Statements Non-current (155,565) 207 Sahaviriya Steel Industries Public Company Limited Net 1,701,110 Net assets 1,701,110 Carrying amount of non-controlling amount of non-controlling 10 Carrying Non-controlling interests interest 833,540 409 (33,967) 799,982 interest 833,540 409 (33,967) 799,982 The following table summarises the information relating to each of the Group’s subsidiaries that Revenue 286,334 Revenue 286,334 has a material non-controlling interest, before any intra-group eliminations: Profit 68,643 31 December 2014 Profit 68,643 Other comprehensive income (17,020) 31 December 2015 Other (17,020) Total comprehensive comprehensiveincome income 51,623 Other Total comprehensive income 51,623 Profit allocated to non-controlling individually Profit allocated to non-controlling interest 33,772 (1,199) Intra-group 3,622 36,195 immaterial Prachuap Port interest 33,772 (1,199) 3,622 36,195 Other comprehensive income allocated Co., Ltd. subsidiaries eliminations Total Other comprehensiveinterest income allocated to non-controlling (in thousand Baht) to non-controlling interest (8,340) 14 (354) (8,680) Non-controlling interest percentage 49% (8,340) 14 (354) (8,680) Current assets 156,126 Non-current assets 1,657,630 Cash flows from operating activities 176,389 Cash flows from operating activities 176,389 Current liabilities (215,513) Cash flows used in investing activities (39,300) Cash flows in (39,300) Non-current liabilities (98,441) Cash flows used used in investing financing activities activities Cash flows in financing activities Net assetsused 1,499,802 (dividends to non-controlling interest: (dividends to non-controlling interest: Carrying amount of non-controlling 44.1 million) (2,483) 44.1 million) (2,483) interest 734,903 160 (28,356) 706,707 Net increase in cash and cash Net increase in cash and cash equivalents 134,606 equivalents 134,606 Revenue 244,011 Profit (127,063) Other comprehensive income (13,090) 11 Investments in joint venture 11 Investments in joint venture Total comprehensive income (140,153) Unit: Thousand Baht Profit allocated to non-controlling Consolidated Separate Consolidated Separate Consolidated financial statements financial statements interest (62,197) (175) Separate 5,477 (56,895) financial statements financial statements financial statements financial statements Note 2015 2014 2015 2014 Other comprehensive income 2015 2014 2015 2014 Note 2015 2014 2015 2014 (in thousand Baht) allocated to non-controlling interest Note (in thousand Baht) (6,414) (17) (950) 3,159,668 At 1 January 3,418,594 3,839,291 3,159,668 (7,381) At 1 January 3,418,594 3,839,291 3,159,668 3,159,668 Actuarial gains 1,248 Actuarial gains 1,248 Share offlows net profit ofoperating equity - accounted Cash fromof activities 197,802 Share of net profit equity accounted joint venture 16,429 301,942 Cashventure flows used in investing activities (139,955) joint 16,429 301,942 --Dividend income (169,164) (723,887) Cash flows used in financing activities Dividend income (169,164) (723,887) --Less (dividends loss on liquidation of subsidiary 2(e) (644,089) to non-controlling Less loss on liquidation of subsidiary 2(e) (644,089) At 31 December 2,621,770 3,418,594 3,159,668 3,159,668 29.4 million) (124,643) At 31interest: December 2,621,770 3,418,594 3,159,668 3,159,668 Net decrease in cash and cash equivalents (66,796)

53 53

52


Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Annual Report 2015 to the Financial Statements and its Joint Notes Venture Sahaviriya Steel Industries Public Company Limited Sahaviriya Steel IndustriesPublic PublicCompany CompanyLimited, Limited,its itsSubsidiaries Subsidiaries Industries Notes toSahaviriya the financialSteel statements Sahaviriya Sahaviriya Sahaviriya Sahaviriya Steel Steel Steel Industries Industries Industries Industries Public Public Public Public Company Company Company Company Limited, Limited, Limited, Limited, its its Subsidiaries its itsSubsidiaries Subsidiaries Subsidiaries andits itsSteel Joint Venture and Joint Venture and and and and its its Joint its itsto Joint Joint Joint Venture Venture Venture Venture Notes to the financial statements Notes the financial statements Sahaviriya Steel Industries Company Limited, its Subsidiaries Sahaviriya Steel Industries PublicPublic Company Limited, itsincome Subsidiaries Notes Notes Notes Notes to the to to to the the financial the financial financial financial statements statements statements statements Investments in joint venture as 31 December 2015 and 2014, and dividend from those investments for the years then ended were as follows: and its Joint Venture and its Joint Venture Consolidated financial statements

Notes to the financial statements Ownership Interest Paid-up capitaland Costdividend method Impairment Atended equity -were net Dividend income Investments joint venture December 2015 and2014, 2014,and and dividendincome incomeEquity frommethod thoseinvestments investments forthe theyears yearsthen then ended wereasasfollows: follows: Notes to Investments the financial statements ininjoint venture asas3131December 2015 from those for Consolidated financial statements Type of business 2015as 31 2014 2015 2014 2015 2014 2015 2014 2015 2014 For the Consolidated financial statements Investments Investments Investments Investments in joint in ininjoint joint joint venture venture venture venture as asasDecember 31 31 31December December December 2015 2015 2015 2015 andand and 2014, and2014, 2014, 2014, andand and dividend anddividend dividend dividend income income income income from from from from those those those those investments investments investments investments for for the for forthe years the theyears years years thenthen then ended then2015 ended ended ended were were were were as2014 follows: as asasfollows: follows: follows: Consolidated financial statements

208

2014 period from Ownership Interest Paid-upcapital capital Costmethod method Equity method Impairment equity- net - net Dividendincome income Paid-up Cost Equity method Impairment AtAtequity Dividend Consolidated Consolidated Consolidated Consolidated Consolidated financial financial financial financial financial statements statements statements statements statements (in thousand Baht) (%) Ownership Interest Investments inofof joint venture as2015 31 December 2015 and 2014, and dividend income fromEquity those investments the years then ended were as---follows: 12014 January Type business 2015 2014 Paid-up 2015 2014 2015 2014 2015 2014 for 2015 2014 2015 For theincome 2014 Type business 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 For the 2014 Ownership Ownership Ownership Ownership Ownership Interest Interest Interest Interest Interest Paid-up Paid-up Paid-up Paid-up capital capital capital capital capital Cost Cost Cost method Cost Cost method method method method Equity Equity Equity Equity method method method method method Impairment Impairment Impairment Impairment Impairment At equity At At At At equity equity equity equity net net net net net Dividend Dividend Dividend Dividend Dividend income income income income Investments in joint venture as 31 December 2015 and 2014, and dividend income from those investments for the years then ended were as follows: 2015 to 2 Consolidated financial statements period from period from TypeType Type Type ofType business of of ofof business business business business 20152015 2015 2015 2015 20142014 2014 2014 2014 20152015 2015 2015 2015 20142014 2014 2014 2014 20152015 2015 2015 2015 2014 2014 2014 2014 2014 20152015 2015 2015 2015 statements 20142014 2014 2014 2014 20152015 2015 2015 2015 20142014 2014 2014 2014 20152015 2015 2015 2015 20142014 2014 2014 2014 For the For For For For the the the the 20142014 2014 2014 2014 Consolidated thousand Baht) (%) (in(inthousand Baht) 2015 2014 2015 2014 2015 Cost method 2014 financial 2015 2014 2015 2014 2015 At equity - 2014 For the period 2014 Ownership(%) Interest Paid-up capital Equity method Impairment net October 1January January 1Dividend period period period period period from from from from from income Ownership (%) Interest Paid-up capital Cost method Equity method Impairment At equity net Dividend income (%) (in thousand Baht) from (in thousand (in (in (in (in thousand thousand thousand thousand Baht) Baht) Baht) Baht) (%) (%) (%) (%) Type of business 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 For thetoto2 2 2014 2015 2015 January 111January January January Type of business 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 For1 the 2014 11January January Joint venture period from October October 2015 2015 2015 2015 to 2015 2 to to to to 2 2 2 2 period from 2015 to (in thousand Baht) (%) 1October January (in thousand Baht) 2015 (%) 2015 October October October October 1 January 2 October 2015 to 2 Jointventure venture Direct holding 2015 2015 2015 2015 2015 Joint 2015 to 2 2015 October Joint Joint Joint venture Joint venture venture venture ventureProduction and ThaiJoint Cold Rolled October 2015 Steel Sheet Public distribution Direct holding Direct holding 2015 Joint venture Company Limited of cold Production Thai ColdRolled Rolled Productionand and Direct Direct Direct Direct Direct holding holding holding holding holding Joint venture Thai Cold rolled coils 35.19 4,816,350 4,816,350 3,817,962 3,817,962 2,621,770 2,699,265 2,621,770 2,699,265 Steel Sheet Public distribution Steel Sheet Public distribution Thai Thai Cold Thai Thai Thai Cold Cold Rolled Cold Cold Rolled Rolled Rolled Rolled Production Production Production Production Production and and and and and35.19 Direct holdingLimited Indirect holding Company Limited of cold Company of cold Steel Steel Steel Steel Sheet Steel Sheet Sheet Sheet Public Sheet Public Public Public Public distribution distribution distribution distribution distribution Direct holding RedcarCompany Bulk Terminal Deep-sea port Production and Thai Cold Rolled rolledcoils coils 35.19 35.19 4,816,350 4,816,350 4,816,350 3,817,962 3,817,962 3,817,962 2,621,770 2,621,770 2,699,265 2,699,265 2,621,770 2,699,265 2,699,265 rolled 35.19 35.19 4,816,350 3,817,962 --2,621,770 --Company Company Company Company Limited Limited Limited Limited Limited of cold of of ofof cold cold cold cold Thai Cold Rolled Production and Limited Indirect and marine distribution Steel Sheet Public Indirectholding holdingrolledrolled rolled rolled coils rolled coils coils coils coils 35.19 35.19 35.19 35.19 35.19 35.19 35.19 35.19 35.19 35.19 4,816,350 4,816,350 4,816,350 4,816,350 4,816,350 4,816,350 4,816,350 4,816,350 4,816,350 4,816,350 3,817,962 3,817,962 3,817,962 3,817,962 3,817,962 3,817,962 3,817,962 3,817,962 3,817,962 3,817,962 2,621,770 2,621,770 2,621,770 2,621,770 2,621,770 2,699,265 2,699,265 2,699,265 2,699,265 2,699,265 2,621,770 2,621,770 2,621,770 2,621,770 2,621,770 2,699,265 2,699,265 2,699,265 2,699,265 2,699,265 Steel Sheet Public distribution shipping ofDeep-sea GBP 26.5 cold Company Limited Redcar Bulk Terminal port Redcar Bulk Terminal Indirect Indirect Indirect Indirect Indirect holding holding holding holding holding Company Limited of cold Deep-sea port services 50.00 million 4,816,350767,6243,817,962 719,3292,699,265719,3292,699,265 169,164 rolled coils 35.19 35.19 4,816,350 3,817,962 2,621,770 - - 2,621,770 - 624,308 Limited and marine Limited and marine Redcar Redcar Redcar Redcar Redcar Bulk Bulk Terminal Bulk Bulk Bulk Terminal Terminal Terminal Terminal Deep-sea Deep-sea Deep-sea Deep-sea Deep-sea port port port port port35.19 rolled coils 35.19 4,816,350 4,816,350 3,817,962 3,817,962 2,621,770 2,699,265 2,621,770 2,699,265 Total Limited Indirect holding shipping GBP 26.5 3,817,962 4,585,586 2,621,770 3,418,594 2,621,770 3,418,594 169,164 624,308 shipping GBP 26.5 Limited Limited Limited Limited and marine and and and and marine marine marine marine Indirect holding Redcar Bulk Terminalshipping Deep-sea port services 50.00 million 767,624 719,329 719,329 169,164 624,308 services -50.00 - - GBPGBP million -767,624 -719,329 ---719,329 169,164 624,308 shipping shipping shipping shipping GBP 26.5 GBP GBP 26.5 26.5 26.5 26.5 Redcar Bulk Terminal Deep-sea port Limited and marine Total services services services services services 50.00 50.00 50.00 50.00 50.00 million million million million million 767,624 767,624 767,624 767,624 767,624 719,329 719,329 719,329 719,329 719,329 719,329 719,329 719,329 719,329 719,329 169,164 169,164 169,164 169,164 169,164 624,308 624,308 624,308 624,308 624,308 Thai Cold Rolled Steel Sheet Public Company Limited and Redcar Bulk Terminal Limited were incorporated in Thailand and United Kingdom, respectively. 3,817,962 4,585,586 2,621,770 3,418,594 2,621,770 3,418,594 169,164 624,308 Total 3,817,962 4,585,586 2,621,770 3,418,594 2,621,770 3,418,594 169,164 624,308 Limited and marine GBP 26.5 shipping TotalTotal Total Total Total 3,817,962 3,817,962 3,817,962 3,817,962 3,817,9624,585,586 4,585,586 4,585,586 4,585,586 4,585,586 2,621,770 2,621,770 2,621,770 2,621,770 2,621,770 3,418,594 3,418,594 3,418,594 3,418,594 3,418,594 --- --- - 2,621,770 2,621,770 2,621,770 2,621,770 2,621,770 3,418,594 3,418,594 3,418,594 3,418,594 3,418,594 169,164 169,164 169,164 169,164 169,164624,308 624,308 624,308 624,308 624,308 shipping GBP 26.5 50.00 million 719,329 719,329 169,164 624,308 Thai Coldservices Rolledthe Steel Sheet Public Company Limited and Bulk Limited wereincorporated incorporated and United Kingdom, respectively. As at 31Thai December 2015, has pledged 150,176,007 common shares inTerminal a 767,624 joint-venture, Thai Cold Rolled Steel Sheet- Public Company Limited Cold Rolled Steel Sheet Public Company Limited Redcar Bulk Terminal were ininThailand and Kingdom, respectively. services - Company 50.00 million and -Redcar 767,624 -Limited 719,329 -Thailand - United 719,329 169,164 624,308 Total 3,817,962 4,585,586 2,621,770 UK 3,418,594 2,621,770 3,418,594 169,164 624,308 to Marubeni-Itochu Steel Inc. for a trading facility forLimited the latter extended to Sahaviriya Steel Industries Limited. ThaiThai Thai Thai Cold Cold Cold Cold Rolled Rolled Rolled Rolled Steel Steel Steel Steel Sheet Sheet Sheet Sheet Public Public Public Public Company Company Company Company Limited Limited Limited andand and Redcar and Redcar Redcar Redcar Bulk Bulk Bulk Bulk Terminal Terminal Terminal Terminal Limited Limited Limited Limited were were were were incorporated incorporated incorporated incorporated in inin Thailand Thailand Thailand and and United andUnited United United Kingdom, Kingdom, Kingdom, Kingdom, respectively. respectively. respectively. respectively. Total 3,817,962 4,585,586 2,621,770 3,418,594 - in Thailand - and2,621,770 3,418,594 169,164 624,308

Asatat3131December December2015, 2015,the theCompany Companyhas haspledged pledged150,176,007 150,176,007common commonshares sharesinina ajoint-venture, joint-venture,Thai ThaiCold ColdRolled RolledSteel SteelSheet SheetPublic PublicCompany CompanyLimited Limited As Thai Cold Rolled Steel Sheet Public Company Limited and Redcar Bulk Terminal Limited were incorporated in Thailand and United Kingdom, respectively. The Company set-up a provision for loss on common shares in a joint-venture, Thai Cold Rolled Steel Sheet Public Company Limited pledged as collateral to Marubeni-Itochu Steel Inc. for a trading facility for the latter extended to Sahaviriya Steel Industries UK Limited. AsCold at As As As 31 at atRolled atDecember 31 31 31December December December 2015, 2015, 2015, the the Company the the Company Company Company has has pledged haspledged pledged pledged 150,176,007 150,176,007 150,176,007 common common common common shares shares shares in ain in joint-venture, inaawere ajoint-venture, joint-venture, joint-venture, ThaiThai Thai Thai Cold Cold Cold Cold Rolled Rolled Rolled Rolled Steel Steel Steel Steel Sheet Sheet Sheet Sheet Public Public Public Public Company Company Company Company Limited Limited Limited Limited to Marubeni-Itochu Steel Inc. for ahas trading facility for the latter extended toshares Sahaviriya Steel Industries Limited. Thai Steel2015, Sheet Public Company Limited and150,176,007 Redcar Bulk Terminal Limited incorporated inUK Thailand and United Kingdom, respectively. to Marubeni-Itochu Steel Inc. ofInc. Baht 499 million. to Marubeni-Itochu to totoMarubeni-Itochu Marubeni-Itochu Marubeni-Itochu Steel Steel Steel Steel Inc. Inc. for Inc.afor for for trading aaatrading trading trading facility facility facility facility for the for for forthe latter the thelatter latter latter extended extended extended extended to Sahaviriya to totoSahaviriya Sahaviriya Sahaviriya Steel Steel Steel Steel Industries Industries Industries Industries UKUK UK Limited. UKLimited. Limited. Limited. AsThe at 31 December 2015, the Company hason pledged 150,176,007 sharesThai in a Cold joint-venture, ThaiSheet Cold Rolled Steel Sheet Publicpledged Company Company set-up provision for loss on150,176,007 common shares ajoint-venture, joint-venture, Thai ColdRolled Rolled Steel SheetPublic Public Company Limited pledged collateral Company set-up a aprovision for loss common shares ininacommon Steel Company Limited asasLimited collateral As at 31 The December 2015, the Company has pledged common shares in a joint-venture, Thai Cold Rolled Steel Sheet Public Company Limited to Marubeni-Itochu Steel Inc. for a trading facility for the latter extended to Sahaviriya Steel Industries UK Limited. to Marubeni-Itochu Steel Inc. of Baht 499 million. TheThe The Company The Company Company set-up set-up set-up set-up a Inc. provision aaSteel aprovision provision provision foroffor loss for for loss loss on loss common on on onfor common common common shares shares shares in ain in joint-venture, inaaajoint-venture, joint-venture, joint-venture, ThaiThai Thai Thai Cold Cold Cold Cold Rolled Rolled Rolled Rolled Steel Steel Steel Steel Sheet Sheet Sheet Sheet Public Public Public Public Company Company Company Company Limited Limited Limited Limited pledged pledged pledged pledged as collateral as asascollateral collateral collateral to Company Marubeni-Itochu Baht 499 million. to Marubeni-Itochu Steel for aInc. trading facility theshares latter extended to Sahaviriya Steel Industries UK Limited. to Marubeni-Itochu to totoMarubeni-Itochu Marubeni-Itochu Marubeni-Itochu Steel Steel Steel Steel Inc.Inc. Inc. of Inc. Baht of ofofBaht Baht Baht 499499 499 million. 499million. million. million. The Company set-up a provision for loss on common shares in a joint-venture, Thai Cold Rolled Steel Sheet Public Company Limited pledged as collateral The Company set-up a provision for loss on common shares in a joint-venture, Thai Cold Rolled Steel Sheet Public Company Limited pledged as collateral to Marubeni-Itochu Steel Inc. of Baht 499 million. to Marubeni-Itochu Steel Inc. of Baht 499 million. 54 5454 54 54 54 54 54

54


shipping services

Total

-

50.00

-

GBP 26.5 million

3,817,962

767,624 4,585,586

2,621,770

719,329

-

-

3,418,594

-

-

2,621,770

719,329

169,164

624,308

3,418,594

169,164

624,308

Thai Cold Rolled Steel Sheet Public Company Limited and Redcar Bulk Terminal Limited were incorporated Annual Report 2015 in Thailand and United Kingdom, respectively. Notes to the Financial Statements Sahaviriya Steel Industries Public Company Limited

209

As at 31 December 2015, the Company has pledged 150,176,007 common shares in a joint-venture, Thai Cold Rolled Steel Sheet Public Company Limited to Marubeni-Itochu Steel Inc. for a trading facility for the latter extended to Sahaviriya Steel Industries UK Limited.

Sahaviriya Sahaviriya Sahaviriya SahaviriyaSteel Steel Steel SteelIndustries Industries Industries IndustriesPublic Public Public PublicCompany Company Company CompanyLimited, Limited, Limited, Limited,its its its itsSubsidiaries Subsidiaries Subsidiaries Subsidiaries

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Sahaviriya Steel Industries Public Company Limited, itsCold Subsidiaries The Company set-up aVenture provision for loss on common shares in a joint-venture, Thai Rolled Steel Sheet Public Company Limited pledged as collateral and and and and its its its itsJoint Joint Joint Joint Venture Venture Venture and its Joint Venture to Marubeni-Itochu Steel Inc. of Baht 499 million. and its Joint Venture Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Notes Notes Notes Notesto to totothe the the thefinancial financial financial financialstatements statements statements statements Notes to Joint the financial statements to the financial statements andNotes its Venture Notes to the financial statements

Separate financial statements Separate Separate Separate Separate Separate financial financial financial financial financial statements statements statements statements statements Separate financial statements Separate financial statementsImpairment Type Type Type Type Type of of of ofof business business business business business Ownership Ownership Ownership Ownership Ownership interest interest interest interest interest Paid-up Paid-up Paid-up Paid-up Paid-up capital capital capital capital capital Cost Cost Cost Cost Cost method method method method method Impairment Impairment Impairment Impairment At At At At At cost cost cost cost cost ----net net -net net net Dividend Dividend Dividend Dividend Dividend income income income income income TypeType of business Ownership interest Paid-up capital Cost Cost method Impairment At cost net Dividend income of business 2015 Ownership interest 2015 Paid-up capital method Impairment At -cost - net Dividend income 2015 2015 2015 2015 2014 2014 2014 2014 2014 2015 2015 2015 2015 2014 2014 2014 2014 2014 2015 2015 2015 2015 2015 2014 2014 2014 2014 2014 2015 2015 2015 2015 2015 2014 2014 2014 2014 2014 2015 2015 2015 2015 2015 2014 2014 2014 2014 2014 2015 2015 2015 2015 2015 2014 2014 2014 2014 Separate statements 2015 2015 2014 2015 2014 2015 financial 2014 2014 2015 2014 2015 2014 2014 20152015 20142014 20152015 20142014 54 20152015 20142014 (in 2015 20142014 20152015 20142014 20152015 20142014 2015 (%) (%) (%) (%) (%) (in (in (in (in thousand thousand thousand thousand thousand Baht) Baht) Baht) Baht) Baht) Type of business Ownership interest Paid-up capital Cost method Impairment At cost - net Dividend income (%) (%) (in thousand Baht)Baht) (in thousand Joint Joint Joint Joint Joint venture venture venture venture venture 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 Joint venture Joint venture entity entity entity entity entity (%) (in thousand Baht) entity entity Thai Thai Thai Thai Thai Cold Cold Cold Cold Cold Rolled Rolled Rolled Rolled Rolled Production Production Production Production Production and and and and and Joint venture Thai Cold Rolled and Thai Cold RolledProduction Production Steel Steel Steel Steel Steel Sheet Sheet Sheet Sheet Sheet Public Public Public Public Public distribution distribution distribution distribution distribution of of of ofofand entity Steel Sheet Public distribution of Steel Sheet Public distribution Company Company Company Company Company Limited Limited Limited Limited Limited cold cold cold cold cold rolled rolled rolled rolled rolled coils coils coils coils coilsof 35.19 35.19 35.19 35.19 35.19 35.19 35.19 35.19 35.19 35.19 4,816,350 4,816,350 4,816,350 4,816,350 4,816,350 4,816,350 4,816,350 4,816,350 4,816,350 4,816,350 3,817,962 3,817,962 3,817,962 3,817,962 3,817,962 3,817,962 3,817,962 3,817,962 3,817,962 3,817,962 658,294 658,294 658,294 658,294 658,294 658,294 658,294 658,294 658,294 658,294 3,159,668 3,159,668 3,159,668 3,159,668 3,159,668 3,159,668 3,159,668 3,159,668 3,159,668 3,159,668 --------Thai Cold Rolled Production and Company Limited cold rolled coils coils35.1935.19 35.1935.19 4,816,350 4,816,350 3,817,962 3,817,962 658,294 658,294 3,159,668 3,159,668 ---- Company Limited cold rolled 4,816,350 4,816,350 3,817,962 3,817,962 658,294 658,294 3,159,668 3,159,668 Total Total Total Total Total 3,817,962 3,817,962 3,817,962 3,817,962 3,817,962 3,817,962 3,817,962 3,817,962 3,817,962 3,817,962 658,294 658,294 658,294 658,294 658,294 658,294 658,294 658,294 658,294 658,294 3,159,668 3,159,668 3,159,668 3,159,668 3,159,668 3,159,668 3,159,668 3,159,668 3,159,668 3,159,668 ------ Steel Sheet Public distribution of Total 3,817,962 3,817,962 658,294 658,294 3,159,668 3,159,668 -Total 3,817,962 3,817,962 658,294 658,294 3,159,668 3,159,668 Company Limited cold rolled coils 35.19 35.19 4,816,350 4,816,350 3,817,962 3,817,962 658,294 658,294 3,159,668 3,159,668 Total

3,817,962

55 55 55 55

3,817,962

658,294

658,294

3,159,668

3,159,668

-

-


210

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes to the Financial Statements

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture Notes to the financial statements Public Company Limited, its Subsidiaries Sahaviriya Steel Industries and its Joint Venture NotesJoint to the financial statements venture

The following table summarises the financial information of the joint venture as included in their own financial Joint venture statements, adjusted for fair value adjustments at acquisition and differences in accounting policies. The table also reconciles the summarised financial information to the carrying amount of the Group’s interest in these The following table summarises the financial information of the joint venture as included in their own financial companies. statements, adjusted for fair value adjustments at acquisition and differences in accounting policies. The table also Joint reconciles the summarised financial information to the carrying amount of theventure Group’s interest in these Unit: Thousand Baht companies. 2015 2014 Joint venture (in thousand Baht) Joint venture Revenue 10,797,725 12,329,182 2015 2014 2015 2014 Profit from continuing operations 124,344 2,155 (in thousand Baht) Other comprehensive income 3,547 Revenue 10,797,725 12,329,182 Total comprehensive income 124,344 5,702 Profit from continuing operations 124,344 2,155 Attributable to NCI 80,587 3,695 Other comprehensive income 3,547 Attributable to investee’s shareholders 43,757 2,007 Total comprehensive income 124,344 5,702 Attributable 80,587 3,695 Current assetsto NCI 2,583,778 3,132,505 Attributable to investee’s shareholders 43,757 2,007 Non-current assets 4,152,747 4,431,830 Current liabilities Current assets Non-current liabilities Non-current assets Net assets Current liabilities Attributable to NCI Non-current liabilities Attributable to investee’s shareholders Net assets Attributable to NCI Group’s interest in net assets of investee at 1 January Attributable to investee’s shareholders Total comprehensive income attributable to the Group Group’s interest in net assets of investee at end of year Group’s interest in net assets of investee at 1 January Elimination of unrealised profit on downstream sales Total comprehensive income attributable to the Group Carrying amount of interest in investee at 31 December Group’s interest in net assets of investee at end of year Elimination of unrealised profit on downstream sales Carrying amount of interest in investee at 31 December

56 56

(1,926,267) 2,583,778 (64,659) 4,152,747 4,745,599 (1,926,267) 3,075,623 (64,659) 1,669,976 4,745,599 3,075,623 2,699,265 1,669,976 2,699,265 2,699,265 (88,264) 2,611,001 2,699,265 (88,264) 2,611,001

(2,884,640) 3,132,505 (58,440) 4,431,830 4,621,255 (2,884,640) 2,995,035 (58,440) 1,626,220 4,621,255 2,995,035 2,795,675 1,626,220 1,248 2,796,923 2,795,675 (97,658) 1,248 2,699,265 2,796,923 (97,658) 2,699,265


Notes to the Financial Statements

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

211

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Notes to the financial statements

and its Joint Venture

Notes to the financial statements

Contingent liabilities and commitments relating to the Joint venture:

Contingent liabilities and commitments relating to the Joint venture: 2015 Contingent liabilities directly incurred by the Group

2015

Contingent liabilities incurred by the Group Group’s share of the directly Joint venture’s contingent liabilities

Baht 20 million

Group’s share of the Joint venture’s contingent liabilities

Baht 20 million

Capital commitments in relation to interest in Joint venture Capital commitments in relation to interest in Joint venture Group’s share of the Joint venture according to - in capital expenditure Group’s share of the Joint venture according to - in capital expenditure

- in non-cancellable operating lease commitments

2014 2014

2015

Baht 40 million, USD 0.18 million, Baht Yen40 73million, million USD 0.18 million, and GBP 0.18 million Yen 73 million and GBP 0.18 million Baht 5 million

2014

Baht 37 million and Yen 11 million Baht 37 million and Yen 11 million

Baht 21 million, USD 0.18 million, Baht Yen 21 198million, million USD 0.18 million, and GBP 0.18 Yen 198 million million and GBP 0.18 million Baht 5 million

-- ininnon-cancellable operating lease commitments raw materials purchases

Baht 11 5 million Baht Baht million, Baht 514million million Yen 0.6 million and USD 1 million - in raw materials purchases Baht 112.18 million, Baht 14 million and USD million Yen 0.6 million and USD million - in other contracts Baht 16 million Baht 161million and USD 2.18 million and YEN 11 million and YEN 11 million - in other contracts Baht 16 million Baht 16 million and YEN 11 million and YEN 11 million In 2015, management performed tests of impairment of the investments in joint venture that had indicators of impairment. The method used to measure recoverable amounts was value in use. In 2015, management performed tests of impairment of the investments in joint venture that had indicators of impairment. method used to measure amounts recoverable amounts value in use. The key assumptions usedThe to measure the recoverable in 2015 werewas as follow: The key assumptions 5used to years measure recoverable Period plusthe terminal value amounts in 2015 were as follow: Discount Rate 9.52% per annum Period years terminal value Fair value less cost to5 sell was usedplus in 2014. Discount Rate 9.52% per annum Fair value less cost to sell was used in 2014.

57 57


Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Notes to the Financial Statements Sahaviriya Sahaviriya Sahaviriya Steel Steel Steel Industries Industries Industries Public Public Public Company Company Company Limited, Limited, Limited, its its its Subsidiaries Subsidiaries Subsidiaries and its Joint Venture Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and and and its its its Joint Joint Joint Venture Venture Venture Notes to the financial statements and its Joint Venture Sahaviriya Steel Industries Notes Notes Notes tototo the the the financial financial financial statements statements statementsPublic Company Limited, its Subsidiaries Notes to the financial statements and its Joint Venture

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

212

Notes to thelong-term financial statements 12 Other investment 1212 12 Other Other Other long-term long-term long-term investment investment investment Sahaviriya Steel Industries Public Company Limited, its Subsidiaries 12 Other long-term investment Other long-term investment as at 31 December 2015 and 2014, and dividend income from this investment for the years then ended were as follows: andOther its Joint Venture Other long-term long-term long-term investment investment investment asasat asat31 at3131 December December December 2015 2015 2015 and and and 2014, 2014, 2014, and and and dividend dividend dividend income income income from from from this this this investment investment investment for for for the the the years years years then then then ended ended ended were were were asasfollows: asfollows: follows: 12 Other Other long-term investment NotesOther to thelong-term financial statements investment as at 31 December 2015 and 2014, and dividend income from this investment for the years then ended were as follows: Consolidated financial statements Consolidated financial statements Ownershipasinterest capital CostConsolidated method Impairment At cost - netas follows: Consolidated Consolidated financial financial statements statements statements Other long-term investment at 31 DecemberPaid-up 2015 and 2014, and dividend income fromfinancial this investment for the years then ended were

Dividend income Ownership Ownership Ownership interest interest interest Paid-up Paid-up Paid-up capital capital capital Cost Cost Cost method method method Impairment Impairment Impairment AtAtcost Atcost cost - net - net - net Dividend Dividend Dividend income income income Consolidated financial statements 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 12 Other Steel long-term investment Sahaviriya Sahaviriya Sahaviriya Steel Steel Industries Industries Industries Public Public Company Company Limited, Limited, its its Subsidiaries Subsidiaries Subsidiaries Ownership interest Paid-upLimited, capital Cost method Impairment At cost - 2014 net Dividend income 2015 2015 2015 (%)Public 2014 2014 2014 Company 2015 2015 2015 2014 2014 2014 its 2015 2015 2015 2014 2014 2014 2015 2015 2015 2014 2014 2014 2015 2015 2015 2014 2014 2015 2015 2015 2014 2014 2014 (in thousand Baht) statements2014 2015 2015 2014 Company 2015 2014 its 2015 2015 Consolidated 2014 financial 2015 2015 2014 2015 2014 Sahaviriya Industries Public Limited, Subsidiaries 2014 2015 2014 2014 2015 2014 2015 2014 2015 2014 (%) (%) (%) (in (in (in thousand thousand thousand Baht) Baht) Baht) Thai Coated SteelSteel Sheet and and and its its its Joint Joint Joint Venture Venture Venture Ownership interest Paid-up capital Cost method Impairment At cost - net Dividend income (in thousand Baht) Thai Thai Thai Coated Coated Coated Steel Steel Steel Sheet Sheet Sheet investment Company Limited 3.70 (%) 3.70 2,206,900 2,206,900 294,000 294,000 294,000 Other long-term as at2014 31 December 2014, and dividend from this investment for 294,000 the years then2015 ended were 2014 as follows: and its Joint Venture 2015 20152015 and 2014 2015 income 2014 2015 2014 2015 2014 Notes Notes Notes to toto the the the financial financial financial statements statements statements Thai Coated Steel Sheet Company Company Company Limited Limited Limited 3.70 3.70 3.70(%) 3.70 3.70 3.70 2,206,900 2,206,900 2,206,900 2,206,900 2,206,900 2,206,900 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 Total 294,000 294,000 294,000 294,000 -(in thousand Baht) Notes to the financial statements Company Limited 3.70 3.70 2,206,900 2,206,900 294,000 294,000 294,000 294,000 -Total Total Total 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 Consolidated financial statements Thai Coated Steel Sheet Total 294,000 294,000 294,000 294,000 Separate statements Ownership interest Paid-up capital Cost method Impairment294,000 At Dividend income-Company Limited 3.70 3.70 2,206,900 2,206,900 294,000 294,000financial294,000 - cost - net -

121212 Other Other Other long-term long-term long-term investment investment investment Ownership interest 2015 2014 Total 12 Other long-term investment Ownership Ownership Ownership interest interest interest 2015 (%) 2014

Paid-up capital Cost method Impairment294,000 At Dividend income Separate Separate Separate financial financial statements statements statements 2015 2014 2015 2014financial 2015 2014 2015 20142015 2014 294,000 294,000 294,000 - cost – net Paid-up Paid-up Paid-up capital capital capital Cost Cost Cost method method method Impairment Impairment Impairment AtAtcost Atcost cost – –net –net net Dividend Dividend Dividend income income income Separate statements 2015 2014 2015 2014 financial 2015 2014 2015 2014 2015 2014 (in thousand Baht) Other Other long-term long-term long-term investment investment asasat as at2014 31 at2014 3131 December December December 2015 2015 2015 and and and 2014, 2014, 2014, and and and dividend dividend dividend income income income from from from this this this investment investment investment for for for the the the years years years then then then ended ended ended were were were as as2014 follows: asfollows: follows:2015 Ownership interest Paid-up capital Cost method Impairment At cost –2014 net Dividend income 2015 2015 2015 (%) 2014 2015 2015 2015 2014 2014 2014 2015 2015 2015 2014 2014 2014 2015 2015 2015 2014 2014 2014 2015 2015 2015 2014 2015 2015 2014 2014 2014 thousand Baht) Thai Other Coated Steel Sheetinvestment Separate financial(in statements OtherLimited long-term as at2014 31 December 2015 and 2014, and dividend income from this investment for the years then2015 ended were 2014 as follows: 2015 2015 2014 2015 2014 2015 2014 2015 2014 (%) (%) (%) (in (in (in thousand thousand thousand Baht) Baht) Baht) Thai Coated Steel Sheet investment Company 3.70 3.70 2,206,900 2,206,900 294,000 294,000 294,000 294,000 Ownership interest Paid-up capital Cost method Impairment At cost – net Dividend incomeSeparate financial statements (%) (in thousand Baht) Thai Thai Thai Coated Coated Coated Steel Steel Steel Sheet Sheet Sheet Company Limited 3.70 3.70 2,206,900 2,206,900 294,000 Consolidated Consolidated Consolidated financial financial financial statements statements statements Total 294,000 294,000 294,000 294,000 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 20152014 Thai Coated Steel Sheet Ownership Company Company Company Limited Limited Limited 3.70 3.70 3.70(%) 3.70 3.70 3.70 2,206,900 2,206,900 2,206,900 2,206,900 2,206,900 2,206,900 294,000 294,000 294,000 294,000 294,000 294,000 financial 294,000 294,000 294,000 294,000 294,000 294,000 Ownership Ownership interest interest interest Paid-up Paid-up Paid-up capital capital capital Cost Cost Cost method method method Impairment Impairment Impairment At At cost At cost cost net net net Dividend Dividend Dividend income income income Consolidated statements Total 294,000 294,000 294,000 294,000 -(in thousand Baht) Company Limited 3.70 3.70 2,206,900 2,206,900 294,000 294,000 294,000 294,000 -Ownership interest Paid-up capital Cost method Impairment At cost net Dividend income 2015 2015 2015 2014 2014 2014 2015 2015 2015 2014 2014 2014 2015 2015 2015 2014 2014 2014 2015 2015 2015 2014 2014 2014 2015 2015 2015 2014 2014 2014 2015 2015 2015 2014 2014 2014 Total Total Total 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 statements 2014 Thai Coated Steel Sheet 2015 2014 2015 2014 2015 Separate 2014 financial 2015 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 (%) (%) (%) (in (in (in thousand thousand thousand Baht) Baht) Baht) Total 294,000 294,000 294,000 294,000 Ownership interest Paid-up capital Cost method Impairment294,000 At Dividend income-Company Limited 3.70 3.70 2,206,900 2,206,900 294,000 294,000 294,000 - cost – net (%) 2014 (in thousand Baht) Thai Thai Thai Coated Coated Coated Steel Steel Steel Sheet Sheet Sheet 2015 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 Total 294,000 294,000 294,000 294,000 Thai Coated Steel Sheet Company Company Company Limited Limited Limited 3.70 3.70 3.70 3.70 3.70 3.70 2,206,900 2,206,900 2,206,900 2,206,900 2,206,900 2,206,900 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 --------(in thousand Baht) Company 3.70 3.70 2,206,900 2,206,900 294,000 294,000 294,000 294,000 Total Total Total 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 - -- - -- - -- - -- Thai CoatedLimited Steel Sheet Total 294,000 294,000 294,000 294,000 Company Limited 3.70 3.70 2,206,900 2,206,900 294,000 294,000 294,000 294,000 -Total

Ownership Ownership Ownership interest interest interest Paid-up Paid-up Paid-up capital capital capital Ownership interest Paid-up capital 2015 2015 2015 2014 2014 2014 2015 2015 2015 2014 2014 2014 2015(%) 2015 2014 (%) (%) 2014 (%) Thai Thai Thai Coated Coated Coated Steel Steel Steel Sheet Sheet Sheet Thai Coated Steel Sheet Company Company Company Limited Limited Limited 3.70 3.70 3.70 3.70 3.70 3.70 2,206,900 2,206,900 2,206,900 2,206,900 2,206,900 2,206,900 Company Limited 3.70 3.70 2,206,900 2,206,900 Total Total Total Total

Separate Separate financial financial financial statements statements statements 294,000 294,000 Separate 294,000 294,000 Cost Cost Cost method method method Impairment Impairment Separate financial Impairment statements Cost method Impairment 2015 2015 2015 2014 2014 2014 2015 2015 2015 2014 2014 2014 2015 2014 2015 2014 (in (in(in thousand thousand thousand Baht) Baht) Baht) (in thousand Baht) 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 58 585858 58 58

AtAtcost Atcost cost – –net –net net At cost –2014 net 2015 2015 2015 2014 2014 2015 2014 --- -- -

--- -- -

Dividend Dividend Dividend income income income Dividend income 2015 2015 2015 2014 2014 2014 2015 2014 --- -- -

--- -- -


Sahaviriya Sahaviriya Steel Steel Industries Industries Public Public Company Company Limited, Limited, its its Subsidiaries Subsidiaries and its Joint Venture Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its JointNotes Venture to the Financial Statements Notes to the financial statements Notes to Joint the financial statements and its Venture

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

213

Notes to the financial statements 13 13 13

Property, Property, plant plant and and equipment equipment Property, plant and equipment

Consolidated financial statements

Consolidated financial financialstatements statements Consolidated

Note Note Cost Cost // revaluation revaluation At 1 January 2014 At 1 January 2014 Cost / revaluation Additions Additions At 1 January 2014 Transfers Transfers Additions Disposals Disposals Transfers Transfer to intangible assets Transfer Disposalsto intangible assets Effect of movements in Effect of to movements Transfer intangibleinassets exchange rates exchange rates Effect of movements in At 31 2014 and At 31 December December exchange rates 2014 and 1 January 2015 January 20152014 and At1 31 December Additions Additions 1 January 2015 Transfers Transfers Additions Disposals Disposals Transfers Impairment loss loss on on property, property, plant Impairment plant and and Disposals equipment previously revalued equipment previously revalued Impairment loss on property, plant and Effect of in Effect of movements movements in revalued equipment previously exchange rates exchange rates Effect of movements in Total Total exchange rates Derecongnition of Derecongnition of property, property, plant plant and and Total equipment following liquidation of equipment following liquidation of Derecongnition of property, plant and subsidiary subsidiary equipment following liquidation of At 31 Atsubsidiary 31 December December 2015 2015 At 31 December 2015

Note

Land Land and and land land improvement improvement Land and land improvement 2,976,364 2,976,364 675 675 2,976,364 -675 --6,103 6,103

2,993,543 2,993,543 292 292 2,993,543 32,792 32,792 292 -32,792 -2,519 2,519

64,732,674 64,732,674 59,409 59,409 64,732,674 701,033 701,033 59,409 (226,082) (226,082) 701,033 -(226,082) 168,639 168,639

139,169 139,169 3,122,311 3,122,311 139,169 3,122,311

(11,370) 57,446 57,446 3,075,909 3,075,909 57,446 3,075,909

(664,352) 3,736,977 3,736,977 68,572,927 68,572,927 3,736,977 68,572,927

(613,303) (613,303) 2,462,606 2,462,606 (613,303) 2,462,606

(39,927,012) (39,927,012) 28,645,915 28,645,915 (39,927,012) 28,645,915

6,103 2,983,142 2,983,142 -2,983,142 ----

2(e) 2(e) 2(e)

Factory Factory and and office buildings office buildings Factory and office buildings

Machinery, Machinery, tool tool and factory factory and Machinery, tool equipment equipment and factory equipment

(1,485,801) (1,485,801) 1,636,510 1,636,510 (1,485,801) 1,636,510

2,519 3,029,146 3,029,146 687 687 3,029,146 -687 -(11,370) (11,370)

168,639 65,435,673 65,435,673 34,069 34,069 65,435,673 134,317 134,317 34,069 (103,757) (103,757) 134,317 (103,757) (664,352) (664,352)

59 59 59

Consolidated financial statements Office Office furniture, furniture, fixtures and and fixtures Office furniture, Vehicles equipment Vehicles equipment fixtures and (in thousand Baht) (inequipment thousand Baht) Vehicles (in thousand Baht) 210,094 210,094 7,456 7,456 210,094 2,042 2,042 7,456 (12,984) (12,984) 2,042 -(12,984) --

96,616 96,616 12,065 12,065 96,616 -12,065 (3,889) (3,889) -(3,889) --

Assets Assets under under construction and construction and Assets under installation installationand construction installation

71,371,889 71,371,889 734,856 734,856 71,371,889 -734,856 (242,955) (242,955) (7,583) (7,583) (242,955) (7,583) 177,329 177,329

(675,722) 3,967,170 3,967,170 75,585,114 75,585,114 3,967,170 75,585,114

104,792 104,792 1,250 1,250 104,792 -1,250 (1,396) (1,396) (1,396) --

200,930

104,646

33,578 33,578 508,391 508,391 33,578 508,391

-104,646 104,646 104,646

(405,560) (405,560) 102,831 102,831 (405,560) 102,831

-200,930 200,930 200,930

-104,646 104,646 -

Total

362,598 362,598 654,959 654,959 362,598 (735,867) (735,867) 654,959 -(735,867) (7,583) (7,583) (7,583) 68 68

206,608 206,608 2,894 2,894 206,608 92 92 2,894 (8,664) (8,664) 92 (8,664) --200,930 200,930 -

Total Total

68 274,175 274,175 337,162 337,162 274,175 (134,409) (134,409) 337,162 (2,115) (2,115) (134,409) (2,115) --

177,329 72,033,536 72,033,536 376,062 376,062 72,033,536 -376,062 (115,932) (115,932) (115,932) (675,722) (675,722)

(42,431,676) (42,431,676) 33,153,438 33,153,438 (42,431,676) 33,153,438


Additions

292

675

59,409

Sahaviriya Steel Industries Public Company- Limited, 32,792 its Subsidiaries Transfers 701,033 and its Joint Venture Disposals (226,082) intangible assets NotesTransfer to thetofinancial statements Notes to the Effect of movements in Financial Statements

13

exchange rates At 31 December 2014and and equipment Property, plant 1 January 2015 Additions Transfers Disposals Impairment loss on property, plant and equipment previously revalued Effect of movements in exchange rates Cost / revaluation Total At 1 January 2014 Derecongnition of property, plant and Additions equipment following liquidation of Transfers subsidiary Disposals At 31 December 2015 Transfer to intangible assets Effect of movements in exchange rates At 31 December 2014 and 1 January 2015 Additions Transfers Disposals Impairment loss on property, plant and equipment previously revalued Effect of movements in exchange rates Total Derecongnition of property, plant and equipment following liquidation of subsidiary At 31 December 2015

-

Note

2(e)

6,103

2,519

2,983,142 -

3,029,146 687 -

Land and land improvement

Factory and (11,370) office buildings

139,169 3,122,311 2,976,364 675 (1,485,801) 1,636,510 -

57,446 3,075,909 2,993,543 292 32,792 (613,303) 2,462,606 -

6,103

2,519

2,983,142 -

3,029,146 687 -

-

2(e)

-

-

168,639

7,456 2,042 (12,984) Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

-

12,065 (3,889) -

65,435,673 206,608 104,792 34,069 2,894 1,250 Consolidated financial statements 134,317 Consolidated financial 92 statements (103,757) (8,664) (1,396) Machinery, tool Office furniture, and factory fixtures and (664,352) Vehicles equipment equipment (in thousand Baht) 3,736,977 68,572,927 200,930 104,646 64,732,674 210,094 96,616 59,409 7,456 12,065 701,033 2,042 (39,927,012) (226,082) (12,984) (3,889) 28,645,915 200,930 104,646 168,639 65,435,673 34,069 59 134,317 (103,757)

(11,370)

(664,352)

206,608 2,894 92 (8,664)

654,959 (735,867) (7,583) 68 274,175 337,162 (134,409) (2,115) Assets under construction and installation 33,578 508,391 362,598 654,959 (735,867) (405,560) 102,831 (7,583)

104,792 1,250 (1,396)

68 274,175 337,162 (134,409) (2,115)

-

-

-

734,856 (242,955) (7,583)

214

177,329 72,033,536 376,062 (115,932) (675,722) Total 3,967,170 75,585,114 71,371,889 734,856 (42,431,676) (242,955) 33,153,438 (7,583) 177,329 72,033,536 376,062 (115,932) (675,722)

139,169 3,122,311

57,446 3,075,909

3,736,977 68,572,927

200,930

104,646

33,578 508,391

3,967,170 75,585,114

(1,485,801) 1,636,510

(613,303) 2,462,606

(39,927,012) 28,645,915

200,930

104,646

(405,560) 102,831

(42,431,676) 33,153,438

59


Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Notes to the Financial Statements and its JointSteel Venture Sahaviriya Industries Public Company Limited, its Subsidiaries Notes to the financial statements and its Joint Venture

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

215

Notes to the financial statements

Consolidated financial statements

Consolidated financial statements Note Depreciation and impairment losses At 1 January 2014 Depreciation and impairment losses Depreciation charge for the year At 1 January 2014 Depreciation on revaluation Depreciation charge for the year Disposals Depreciation on revaluation Effect of movements in Disposals exchange rates Effect of movements in At 31 December 2014 and exchange rates 1 January 2015 At 31 December 2014 and Depreciation charge for the year 1 January 2015 Depreciation on revaluation Depreciation charge for the year Disposals Depreciation on revaluation Impairment loss on property, plant, and Disposals equipment previously revalued Impairment loss on property, plant, and Impairment losses equipment previously revalued Effect of movements in Impairment losses exchange rates Effect of movements in Total exchange rates Derecongnition of property, plant and Total equipment following liquidation of Derecongnition of property, plant and subsidiary equipment following liquidation of At 31 December 2015 subsidiary At 31 December 2015

Note

2(e) 2(e)

Land and land improvement Land and land improvement

Factory and office buildings Factory and office buildings

Machinery, tool and factory Machinery, tool equipment and factory equipment

Consolidated financial statements Office furniture, fixtures and Office furniture, Vehicles equipment fixtures and (in thousand Baht) Vehicles equipment (in thousand Baht) 165,279 69,432 16,858 11,023 165,279 69,432 16,858 11,023 (12,922) (3,796) (12,922) (3,796) -

651,880 4,918 651,880 (2,682) 4,918 (2,682) -

1,853,292 84,352 1,853,292 13,014 84,352 13,014 432

16,207,463 2,276,722 16,207,463 227,819 2,276,722 (83,985) 227,819 (83,985) 41,378

654,116 2,557 654,116 (1,654) 2,557 (1,654) 655,019 655,019

432 1,951,090 66,757 1,951,090 10,640 66,757 10,640 (111) 13,422 (111) 13,422 6,716 2,048,514 6,716 2,048,514

41,378 18,669,397 1,805,674 18,669,397 172,108 1,805,674 (83,579) 172,108 (83,579) (583,481) (583,481) 643,333 20,623,452 643,333 20,623,452

169,215 14,842 169,215 14,842 (8,621) (8,621) 175,436 175,436

655,019 655,019

(75,155) 1,973,359 (75,155) 1,973,359

(7,212,653) 13,410,799 (7,212,653) 13,410,799

175,436 175,436

60 60

Assets under construction and Assets under installation construction and installation

Total Total

-

18,947,346 2,393,873 18,947,346 238,151 2,393,873 (100,703) 238,151 (100,703) 41,810

76,659 9,973 76,659 9,973 (1,120) (1,120) 85,512 85,512

-

41,810 21,520,477 1,899,803 21,520,477 181,094 1,899,803 (93,320) 181,094 (93,320) (583,592) 13,422 (583,592) 13,422 650,049 23,587,933 650,049 23,587,933

85,512 85,512

-

(7,287,808) 16,300,125 (7,287,808) 16,300,125


16,858 11,023 Depreciation charge for the year 4,918 84,352 2,276,722 Depreciation on revaluation (2,682) 13,014 227,819 Disposals (83,985) (12,922) (3,796) Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Effect of movements in Annual Report 2015 Notes to the Financial Statements exchange 432 41,378 Sahaviriya Steel Industries Public - Company Limited and its Jointrates Venture December 2014 and NotesAtto31the financial statements 1 January 2015 654,116 1,951,090 18,669,397 169,215 76,659 14,842 9,973 Depreciation charge for the year 2,557 66,757 1,805,674 Depreciation on revaluation (1,654) 10,640 172,108 Consolidated financial statements Disposals (83,579) Consolidated financial (8,621) statements (1,120) Impairment loss on property, plant, and Machinery, tool Office furniture, equipment previously revalued (111) (583,481) and factory fixtures and Land and land Factory and Impairment losses 13,422 Note Vehicles improvement office buildings equipment equipment Effect of movements in (in thousand Baht) exchange rates 6,716 643,333 Depreciation and impairment losses Total 655,019 2,048,514 20,623,452 175,436 85,512 At 1 January 2014 651,880 1,853,292 16,207,463 165,279 69,432 Derecongnition of property, plant and 16,858 11,023 Depreciation charge for the year 4,918 84,352 2,276,722 equipment following liquidation of Depreciation on revaluation (2,682) 13,014 227,819 subsidiary 2(e) (75,155) (7,212,653) Disposals (83,985) (12,922) (3,796) At 31 December 2015 655,019 1,973,359 13,410,799 175,436 85,512 Effect of movements in exchange rates 432 41,378 At 31 December 2014 and 1 January 2015 654,116 1,951,090 18,669,397 169,215 76,659 14,842 9,973 Depreciation charge for the year 2,557 66,757 1,805,674 Depreciation on revaluation Disposals Impairment loss on property, plant, and equipment previously revalued Impairment losses Effect of movements in exchange rates Total Derecongnition of property, plant and equipment following liquidation of subsidiary At 31 December 2015

(1,654) -

2(e)

10,640 -

(111) 13,422

172,108 (83,579)

60

(583,481) -

(8,621) -

(1,120) -

Assets under construction and installation -

2,393,873 238,151 (100,703)

216 41,810 21,520,477 1,899,803 181,094 (93,320) (583,592) 13,422 Total 650,049 23,587,933 18,947,346 2,393,873 238,151 (7,287,808) (100,703) 16,300,125 41,810

-

21,520,477 1,899,803 181,094 (93,320)

-

(583,592) 13,422

655,019

6,716 2,048,514

643,333 20,623,452

175,436

85,512

-

650,049 23,587,933

655,019

(75,155) 1,973,359

(7,212,653) 13,410,799

175,436

85,512

-

(7,287,808) 16,300,125

60


Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its JointSteel Venture Notes to Industries the Financial Statements Sahaviriya Public Company Limited, its Subsidiaries Notes to the financial statements and its Joint Venture

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

217

Notes to the financial statements

Consolidated financial statements

Consolidated financial statements

Net book value At 1 January 2014 Net book value Owned assets At 1 January 2014 Assets under finance leases Owned assets and hire-purchases Assets under finance leases and hire-purchases At 31 December 2014 and 1 January 2015 At 31 December 2014 and Owned assets 1 January 2015 Assets under finance leases Owned assets and hire-purchases Assets under finance leases and hire-purchases At 31 December 2015 Owned assets At 31 December 2015 Assets under finance leases Owned assets and hire-purchases Assets under finance leases and hire-purchases

Land and land improvement Land and land improvement

Factory and office buildings Factory and office buildings

Consolidated financial statements Office furniture, Machinery, tool and fixtures and Office furniture, factory equipment equipment Machinery, tool and fixtures and (in thousand Baht) factory equipment equipment (in thousand Baht)

Vehicles Vehicles

Assets under construction and Assets under installation construction and installation

Total Total

2,324,484

1,140,251

48,205,254

44,815

11,142

362,598

52,088,544

2,324,484 2,324,484 2,324,484

1,140,251 1,140,251 1,140,251

48,205,254 319,957 48,525,211 319,957 48,525,211

44,815 44,815 44,815

11,142 16,042 27,184 16,042 27,184

362,598 362,598 362,598

52,088,544 335,999 52,424,543 335,999 52,424,543

2,329,026

1,073,432

46,469,605

37,393

11,003

274,175

50,194,634

2,329,026 2,329,026 2,329,026 981,491

1,073,432 4,624 1,078,056 4,624 1,078,056 489,247

46,469,605 296,671 46,766,276 296,671 46,766,276 14,976,363

37,393 37,393 37,393 25,494

11,003 17,130 28,133 17,130 28,133 6,497

274,175 274,175 274,175 102,831

50,194,634 318,425 50,513,059 318,425 50,513,059 16,581,923

981,491 981,491 981,491

489,247 489,247 489,247

14,976,363 258,753 15,235,116 258,753 15,235,116

25,494 25,494 25,494

6,497 12,637 19,134 12,637 19,134

102,831 102,831 102,831

16,581,923 271,390 16,853,313 271,390 16,853,313

The gross amount of the Group’s fully depreciated property, plant and equipment that was still in use as at 31 December 2015 amounted to Baht 2,215 million (2014: Baht 2,103 million). The gross amount of the Group’s fully depreciated property, plant and equipment that was still in use as at 31 December 2015 amounted to Baht 2,215 million (2014: Baht 2,103 million).

61 61


to theIndustries Financial Statements Sahaviriya Notes Steel Public Company Limited, its Subsidiaries and its Joint Venture Sahaviriya Steel Industries Notes to the financial statementsPublic Company Limited, its Subsidiaries and its Joint Venture

Notes to the financial statements

218

Separate financial statements

Land and land improvement Cost / revaluation At 1 January 2014 Additions Cost / revaluation Transfers At 1 January 2014 Disposals Additions At 31 December 2014 and Transfers 1 January 2015 Disposals Additions At 31 December 2014 and Transfers 1 January 2015 Disposals Additions Impairment Transfers loss on property, plant, and equipment previously revalued Disposals At 31 December Impairment loss on2015 property, plant, and equipment previously revalued Depreciation and2015 impairment losses At 31 December At 1 January 2014 Depreciation charge for the yearlosses Depreciation and impairment Depreciation on revaluation At 1 January 2014 Disposals Depreciation charge for the year At 31 December 2014 and Depreciation on revaluation 1 January 2015 Disposals Depreciation charge forand the year At 31 December 2014 Depreciation on revaluation 1 January 2015 Disposals Depreciation charge for the year Depreciationloss on revaluation Impairment on property, plant, and equipment previously revalued Disposals Impairment loss losses Impairment on property, plant, and Atequipment 31 December 2015 revalued previously Impairment losses At 31 December 2015

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Land and land improvement 1,007,581 1,007,581 1,007,581 1,007,581 1,007,581 1,007,581 338,912 571 33 338,912 571 33 -339,516 504 46 339,516 - 504 46 -340,066 340,066

Factory and office buildings Factory and office buildings 2,243,852 25 32,530 2,243,852 - 25 32,530 2,276,407 687 2,276,407 687 (11,370) 2,265,724 (11,370) 2,265,724 1,722,423 57,884 11,237 1,722,423 57,884 11,237 1,791,544 44,286 8,863 1,791,544 44,286 8,863 (111) 13,422 1,858,004 (111) 13,422 1,858,004

Separate financial statements Office furniture, Machinery, tool and and Separate fixtures financial statements factory equipment equipment Vehicles Office furniture, (in thousand Baht) Machinery, tool and fixtures and factory equipment 26,101,678 41,529 32,378 26,101,678 (2,645) 41,529 32,378 26,172,940 (2,645) 15,577 8,758 26,172,940 (3,459) 15,577 8,758 (664,352) (3,459) 25,529,464 (664,352) 25,529,464 11,237,577 360,246 206,847 11,237,577 (2,552) 360,246 206,847 11,802,118 (2,552) 274,356 153,148 11,802,118 (1,533) 274,356 153,148 (583,481) (1,533) 11,644,608 (583,481) 11,644,608

62 62

equipment 174,170 (in thousand Baht) 4,501 276 174,170 (12,984) 4,501 276 165,963 (12,984) 2,255 165,963 (7,798) 2,255 (7,798) 160,420 160,420 138,743 12,630 138,743 (12,922) 12,630 138,451 (12,922) 11,281 138,451 (7,766) 11,281 (7,766) 141,966 141,966

Vehicles 70,377 4,602 70,377 (2,044) 4,602 72,935 (2,044) 1,250 72,935 -1,250 74,185 74,185 49,852 7,852 49,852 (1,950) 7,852 55,754 (1,950) 6,679 55,754 -6,679 62,433 62,433

Assets under construction and installation Assets under

construction and installation 101,827 46,500 (65,184) 101,827 46,500 (65,184) 83,143 13,873 (8,758) 83,143 13,873 (8,758) 88,258 88,258 -

Total Total 29,699,485 97,157 29,699,485 (17,673) 97,157 29,778,969 (17,673) 33,642 29,778,969 (11,257) 33,642 (675,722) (11,257) 29,125,632 (675,722) 29,125,632 13,487,507 439,183 218,117 13,487,507 (17,424) 439,183 218,117 14,127,383 (17,424) 337,106 162,057 14,127,383 (9,299) 337,106 162,057 (583,592) (9,299) 13,422 14,047,077 (583,592) 13,422 14,047,077


Land and land improvement Cost / revaluation At 1 January 2014 1,007,581 Notes to theIndustries Financial Statements Sahaviriya Steel Public Company Additions and its Joint Venture Transfers NotesDisposals to the financial statements At 31 December 2014 and 1 January 2015 1,007,581 Additions Transfers Disposals Land- and land improvement Impairment loss on property, plant, and equipment previously revalued Cost revaluation2015 At 31/ December 1,007,581 At 1 January 2014 1,007,581 Additions Depreciation and impairment losses Transfers -338,912 At 1 January 2014 Disposals Depreciation charge for the year 571 Depreciation on revaluation 33 At 31 December 2014 and 1 January 2015 1,007,581 Disposals Additions At 31 December 2014 and Transfers -339,516 1 January 2015 Disposals - 504 Depreciation charge for the year Impairment loss on property, plant, and Depreciation on revaluation 46 equipment previously revalued -Disposals At 31 December 2015 1,007,581 Impairment loss on property, plant, and equipment previously revalued Depreciation and impairment losses Impairment losses At 1 January 2014 At 31 December 2015 Depreciation charge for the year Depreciation on revaluation Disposals At 31 December 2014 and 1 January 2015 Depreciation charge for the year Depreciation on revaluation Disposals

Impairment loss on property, plant, and equipment previously revalued Impairment losses At 31 December 2015

Factory and office buildings

Machinery, tool and factory equipment

2,243,852 26,101,678 Limited, its Subsidiaries

8,863 (11,370) 2,265,724

Annual Report 2015 174,170 Sahaviriya Steel Industries Public Company Limited

Vehicles

Assets under construction and installation

Total

70,377 4,602 (2,044)

101,827 46,500 (65,184) -

29,699,485 219 97,157 (17,673)

26,172,940 165,963 72,935 Separate financial statements 15,577Separate financial 2,255 1,250 statements 8,758 Office furniture, (3,459) Machinery, tool and fixtures(7,798) and factory equipment equipment Vehicles (in thousand Baht) (664,352) 25,529,464 160,420 74,185 26,101,678 174,170 70,377 41,529 4,501 4,602 32,378 276 11,237,577 138,743 49,852 (2,645) (12,984) (2,044) 360,246 12,630 7,852 206,847 26,172,940 165,963 72,935 (2,552) (12,922) (1,950) 15,577 2,255 1,250 8,758 11,802,118 138,451 55,754 (3,459) (7,798) -6,679 274,356 11,281 153,148 (664,352) -(1,533) (7,766) 25,529,464 160,420 74,185

83,143 13,873 (8,758) Assets under construction- and installation 88,258 101,827 46,500 (65,184) 83,143 13,873 (8,758) -

29,778,969 33,642 (11,257) Total (675,722) 29,125,632 29,699,485 97,157 13,487,507 (17,673) 439,183 218,117 29,778,969 (17,424) 33,642 14,127,383 (11,257) 337,106

25 32,530 -

2,276,407 687 Factory and office buildings (11,370) 2,265,724 2,243,852 25 32,530 1,722,423 57,884 11,237 2,276,407 687 1,791,544 44,286

Office furniture, fixtures and equipment (in thousand Baht)

41,529 32,378 (2,645)

4,501 276 (12,984)

-88,258

162,057 (675,722) (9,299) 29,125,632

338,912 340,066 571 33 -

(111) 13,422 1,722,423 1,858,004 57,884 11,237 -

(583,481) 11,237,577 11,644,608 360,246 206,847 62 (2,552)

138,743 141,966 12,630 (12,922)

49,852 62,433 7,852 (1,950)

--

(583,592) 13,422 13,487,507 14,047,077 439,183 218,117 (17,424)

339,516 504 46 -

1,791,544 44,286 8,863 -

11,802,118 274,356 153,148 (1,533)

138,451 11,281 (7,766)

55,754 6,679 -

-

14,127,383 337,106 162,057 (9,299)

340,066

(111) 13,422 1,858,004

(583,481) 11,644,608

141,966

62,433

-

(583,592) 13,422 14,047,077

62


Sahaviriya Steel Public Company Limited, its Subsidiaries Notes to Industries the Financial Statements and its Joint Venture Sahaviriya Steel Industries Notes to the financial statementsPublic Company Limited, its Subsidiaries and its Joint Venture Notes to the financial statements

Net book value At 1 January 2014 Owned assets Net book value Assets under hire-purchase At 1 January 2014 Owned assets Assets under hire-purchase At 31 December 2014 and 1 January 2015 Owned assets At 31 December 2014 and Assets under 2015 hire-purchase 1 January Owned assets Assets under hire-purchase At 31 December 2015 Owned assets Assets under hire-purchase At 31 December 2015 Owned assets Assets under hire-purchase

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

220

Separate Separatefinancial financialstatements statements Land and land improvement Land and land improvement 668,669 668,669 668,669 668,065 668,065 668,065 667,515 667,515 667,515 depreciated

Factory and office buildings Factory and office buildings 521,429 521,429 521,429 484,863 484,863 484,863 407,720 407,720 407,720 property, plant

furniture, SeparateOffice financial statements fixtures and Machinery, tool and factory equipment equipment Office furniture, Baht) Machinery, tool and (in thousand fixtures and factory equipment equipment (in thousand Baht) 14,864,101 35,427 14,864,101 35,427 14,864,101 35,427 14,370,822 27,512 14,370,822 27,512 14,370,822 27,512 13,884,856 18,454 13,884,856 18,454 13,884,856 and equipment that was still in 18,454 use as at 31

Vehicles Vehicles

Assets under construction and installation Assets under construction and installation

4,483 16,042 20,525 4,483 16,042 20,525 4,755 12,426 4,755 17,181 12,426 17,181 2,435 9,317 2,435 11,752 9,317 11,752 2015 December

101,827 101,827 101,827 83,143 83,143 83,143 88,258 88,258 88,258 amounted to

Total Total 16,195,936 16,042 16,211,978 16,195,936 16,042 16,211,978 15,639,160 12,426 15,639,160 15,651,586 12,426 15,651,586 15,069,238 9,317 15,069,238 15,078,555 9,317 15,078,555 1,893 million

The gross amount of the Company’s fully Baht (2014: Baht 1,836 million). The gross amount of the Company’s fully depreciated property, plant and equipment that was still in use as at 31 December 2015 amounted to Baht 1,893 million (2014: Baht 1,836 million).

63 63


Notes to the Financial Statements

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Sahaviriya SahaviriyaSteel SteelIndustries IndustriesPublic PublicCompany CompanyLimited, Limited,its itsSubsidiaries Subsidiaries Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture and anditsitsJoint JointVenture Venture Sahaviriya Sahaviriya Sahaviriya Steel Steel Steel Industries Industries Industries Public Public Public Company Company Company Limited, Limited, Limited, itsits its Subsidiaries Subsidiaries Subsidiaries and its Joint Venture Notes to the financial statements Notes Notes to to the the financial financial statements statements Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and and and itsits Joint itsthe Joint Joint Venture Venture Venture Notes to financial statements and Venture Notes Notes Notes toitsthe to toJoint the the financial financial financial statements statements statements

Notes to the financial statements October 2006, the FAP issued Notification No. 25/2549 allowing entities which carry their assets InIn In October October 2006, 2006,the the FAP FAP issued issuedNotification NotificationNo. No. 25/2549 25/2549allowing allowing entities entitieswhich which carry carry their theirassets assetsatatat

221

revalued amounts calculate depreciation charged the income statements based on the In October 2006, the FAP issued Notificationtoto No. 25/2549 allowing entities which carrybased their at revalued revalued amounts amounts toto tocalculate calculate depreciation depreciation tobebe be charged charged toto tothe theincome incomestatements statements basedassets on onthe the historical cost of the assets instead of on the revalued amounts. TAS 16 (Revised 2009) Property, Plant revalued amounts to calculate depreciation to be charged to the income statements based on the Inhistorical October In InOctober October 2006, 2006, 2006, the FAP the FAP FAP issued issued issued Notification Notification Notification No. No. No. 25/2549 25/2549 25/2549 allowing allowing allowing entities entities entities which which which carry carry carry their their their assets assets assets at atat historical cost cost ofthe of thethe assets assets instead instead of of onon thethe revalued revalued amounts. amounts. TAS TAS 1616 (Revised (Revised 2009) 2009) Property, Property, Plant Plant In October 2006, FAP issued Notification No. 25/2549 allowing entities which carry their assets at and Equipment, states that depreciation shall be recognised within profit loss. During years ended historical cost ofstates the assets instead of onshall the amounts. TAS 16 (Revised 2009) Property, Plant revalued revalued revalued amounts amounts amounts to calculate toto calculate calculate depreciation depreciation depreciation torevalued be to torecognised be charged be charged charged to the toto the the income income income statements statements statements based based based on on the on the the and and Equipment, Equipment, states that that depreciation depreciation shall be be recognised within within profit profit oror orloss. loss. During During years years ended ended revalued amounts to calculate depreciation to be charged to the income statements based on the 31 December 2011, the FAP issued a notification allowing entities to continue the existing method for and Equipment, states that depreciation shall be recognised within profit or loss. During years ended historical historical historical costcost cost of the of ofthe assets thethe assets assets instead instead instead ofaon of of on onthe revalued therevalued revalued amounts. amounts. amounts. TAS TAS TAS 16tocontinue (Revised 16 16 (Revised (Revised 2009) 2009) 2009) Property, Property, Property, Plant Plant Plant 3131 December December 2011, 2011, FAP FAP issued issued notification a the notification allowing allowing entities entities to continue the theexisting existing method method for for historical cost 2011, of assets instead ofaGroup on the revalued amounts. TAS 16 (Revised 2009) Property, Plant another period of 5states years or less. The Group has decided follow this notification. However, had the 31 December the FAP issued notification allowing entities to continue the existing method for and and and Equipment, Equipment, Equipment, states states that that that depreciation depreciation depreciation shall shall shall be recognised be be recognised recognised within within within profit profit profit or loss. or or loss. loss. During During During years years years ended ended ended another another period period of of5the 5years years or or less. less.The The Group has has decided decided toto to follow follow this this notification. notification. However, However, had had the the and Equipment, states that depreciation shall be recognised within profit or loss. During years ended depreciation charge been calculated based on the revalued amounts, net income and earnings per share another period of 5 years or less. The Group has decided to follow this notification. However, had the 31 December 31 31December December 2011, 2011, 2011, the the FAP thecalculated FAP FAP issued issued issued a based notification abased anotification notification allowing allowing allowing entities entities entities to net continue toto continue continue theand the existing the existing existing method method method for for for depreciation depreciation charge charge been been calculated ononthethe revalued revalued amounts, amounts, net income income and earnings earnings per pershare share 31 December 2011, FAP aCompany notification allowing entities tonet continue the existing method for attributable equity owners of the Company would have been affected follows: depreciation charge been calculated based on the revalued amounts, income and earnings perhad share another another another period period period of 5of of years 55the years years or less. or or less. less. The The The Group Group Group has has has decided decided decided tobeen follow to to follow follow this this this notification. notification. notification. However, However, However, had had the the the attributable attributable toto to equity equity owners owners ofissued of the the Company would would have have been affected affected asas as follows: follows: another period of 5been years or less. The Group has decided to follow this However, hadshare the attributable tocharge equity owners of the Company would haveamounts, been affected asincome follows: depreciation depreciation depreciation charge charge been been calculated calculated calculated based based based on the on on the revalued the revalued revalued amounts, amounts, net net income netnotification. income andand and earnings earnings earnings perper share per share depreciation charge been calculated based on the revalued amounts, net income and earnings per share attributable attributable attributable to equity totoequity equity owners owners owners of the of ofthe Company theCompany Company would would would have have have been been been affected affected affected as follows: as asfollows: follows: Consolidated Separate Consolidated Consolidated Separate Separate Consolidated financial statements Separate financial statements attributable to equity owners of the Company would havestatements been affected as follows: financial statements financial statements Consolidated Separate financial financial statements financial financial statements statements 2015 2015 2014 2015 2014 2015 2014 2015 2014 financial statements financial statements 2015 2014 2014 2015 2015 2014 2014 Consolidated Consolidated Consolidated Separate Separate Separate Consolidated Separate 2015 2014 2015 2014 financial financial financial statements statements statements financial financial financial statements statements statements financial financial Decrease profit for the years 2015 2015 2015 statements 2014 2014 2014 2015 2015 2015 statements 2014 2014 2014 Decrease Decrease inin in profit profit for for the the years years 2015 2014 2015 2014 (in thousand Baht) 179,170 237,112 159,637 214,990 Decrease in profit for the years (in (in thousand thousand Baht) Baht) 179,170 179,170 237,112 237,112 159,637 159,637 214,990 214,990 Decrease earnings per share (in thousand Baht) 179,170 237,112 159,637 214,990 Decrease Decrease ininin profit inbasic profit profit for for the forthe years theper years years Decrease Decrease in basic basic earnings earnings per share share Decrease inshare) profit for the years (Baht per share) 0.006 0.007 0.005 0.007 basic earnings per share (in (in thousand (inthousand thousand Baht) Baht) Baht) 179,170 179,170 179,170 237,112 237,112 237,112 159,637 159,637 214,990 214,990 214,990 (Baht (Baht per per share) 0.006 0.006 0.007 0.007 159,637 0.005 0.005 0.007 0.007 (in thousand Baht) 179,170 237,112 159,637 214,990 Decrease diluted earnings per share (Baht 0.006 0.007 0.005 0.007 Decrease Decrease inper basic inshare) basic basic earnings earnings perper share per share share Decrease Decrease inin in diluted diluted earnings earnings per share share Decrease in basic earnings per share (Baht per share) 0.006 0.007 0.005 0.007 diluted earnings per share (Baht (Baht per share) per share) 0.006 0.006 0.007 0.007 0.005 0.005 0.007 0.007 (Baht (Baht per per share) share) 0.006 0.006 0.007 0.007 0.005 0.005 0.007 0.007 (Bahtin per share) 0.006 0.007 0.005 0.007 Decrease Decrease Decrease diluted inin diluted diluted earnings earnings earnings perper share pershare share Decrease in earningsmeeting per shareheld At the Board Directors’ meeting held on October 2015, the directors approved the Company (Baht (Baht per per share) perdiluted share) share) 0.006 0.006 0.006 0.007 0.007 0.007 approved 0.005 0.005 0.005 0.007 0.007 0.007 At At(Baht the the Board Board ofof ofDirectors’ Directors’ meeting heldon on111October October 2015, 2015,the the directors directors approved the theCompany Company toto to (Baht per 0.006 0.007 0.005 0.007to change the accounting policy for the valuation property, plant and equipment from revaluation At the the Board of Directors’ meeting held on 1 October 2015,plant the directors approved the revaluation Company change change theshare) accounting accounting policy policy for forthe the valuation valuation ofof of property, property, plant and andequipment equipment from from revaluation model cost modal starting from 1the January 2016. Such changes accounting policy will be applied change the accounting policy for1held valuation of property, and equipment from revaluation At At the At the Board the Board Board of Directors’ of of Directors’ Directors’ meeting meeting meeting held held on on 1on October 11 October October 2015, 2015, 2015, theplant the directors the directors directors approved approved approved the the Company the Company Company to toto model model atatat cost cost modal modal starting starting from from 1January January 2016. 2016. Such Such changes changes inin in accounting accounting policy policy will willbe beapplied applied At the Board of Directors’ meeting held on 1 October 2015, the directors approved the Company to retrospectively. model at cost modal starting from 1 January 2016. Such changes in accounting policy will be applied change change change the the the accounting accounting accounting policy policy policy for for for the the the valuation valuation valuation of property, of of property, property, plant plant plant and and and equipment equipment equipment from from from revaluation revaluation revaluation retrospectively. retrospectively. change the accounting policy for the valuation of Such property, plant equipment from retrospectively. model model model at cost at atcost cost modal modal modal starting starting starting from from from 1 January 11January January 2016. 2016. 2016. Such Such changes changes changes in accounting ininand accounting accounting policy policy policy will will will berevaluation applied be beapplied applied model at cost modal starting from 1 January Such changes in accounting policy will be applied The impact the financial statement will as follows: retrospectively. retrospectively. retrospectively. The The impact impact onon on the the financial financial statement statement will will bebe be as2016. as follows: follows: retrospectively. The impact on the financial statement will be as follows: Consolidated Separate TheThe The impact impact impact on the on onthe financial thefinancial financial statement statement statement willwill will be as be befollows: as asfollows: follows: Consolidated Consolidated Separate Separate The impact on the financial statement will be asfinancial follows: financial statements financial statements Consolidated Separate financial statements statements financial financial statements statements Unit: Thousand Baht 31 December 2015 31 December 2015 financial statements financial statements Consolidated Consolidated Separate Separate Separate 31Consolidated 31 December December 2015 2015 31 December December 2015 2015 Consolidated financial statements 31 Separate financial statements Consolidated Separate (in thousand Baht) 31 December 2015 31 December 2015 financial financial financial statements statements statements financial financial financial statements statements (in(in thousand thousand Baht) Baht)statements December 31 December 2015 31December December 2015 statements financial statements Statement financial position (in thousand Baht) 31financial 31 31December December 2015 2015 2015 31 December 31 31December 2015 2015 2015 Statement Statement ofof of financial financial position position 31 December 2015 31 December 2015 Decrease property, plant and equipment 5,224,319 5,014,290 Statement of financialplant position (in (in thousand (inthousand thousand Baht) Baht) Baht) Decrease Decrease inin in property, property, plant and and equipment equipment 5,224,319 5,224,319 5,014,290 5,014,290 (in thousand Baht)1,002,858 deferred tax liabilities 1,044,864 1,002,858 Decrease property, plant and equipment 5,224,319 5,014,290 Statement Statement Statement of financial of of financial financial position position position Decrease Decrease inin in deferred deferred tax tax liabilities liabilities 1,044,864 1,044,864 1,002,858 Statement of financial position revaluation surplus 4,179,455 4,011,432 Decrease in deferred tax liabilities 1,044,864 1,002,858 Decrease Decrease ininproperty, inrevaluation property, property, plant plant plant andand and equipment equipment equipment 5,224,319 5,224,319 5,224,319 5,014,290 5,014,290 5,014,290 Decrease Decrease in revaluation surplus surplus 4,179,455 4,179,455 4,011,432 4,011,432 Decrease and equipment 5,224,319 5,014,290 total equity revaluation surplus 4,179,455 4,011,432 Decrease Decrease ininin deferred inproperty, deferred deferred taxplant tax liabilities tax liabilities liabilities 1,044,864 1,044,864 1,044,864 1,002,858 1,002,858 1,002,858 Decrease Decrease in total total equity equity 4,179,455 4,179,455 4,011,432 4,011,432 Decrease tax liabilities 1,044,864 1,002,858 total equity 4,179,455 4,011,432 Decrease Decrease Decrease in in revaluation inindeferred revaluation revaluation surplus surplus surplus 4,179,455 4,179,455 4,179,455 4,011,432 4,011,432 4,011,432 Decrease in revaluation surplus 4,179,455 4,011,432 As 31 December 2015, the Group provided allowance for asset revaluation Baht 92.13 million and Decrease Decrease Decrease in total in intotal total equity equity equity 4,179,455 4,179,455 4,179,455 4,011,432 4,011,432 4,011,432 As As atatat 31 31 December December 2015, 2015, the the Group Group provided provided allowance allowance for for asset asset revaluation revaluation ofof of Baht Baht 92.13 92.13 million million and and Decrease total equity 4,011,432 allowance for impairment loss Baht 13.42 million. As at 31 in December 2015,loss the Group provided allowance for4,179,455 asset revaluation of Baht 92.13 million and allowance allowance for for impairment impairment loss ofof of Baht Baht 13.42 13.42 million. million. for impairment of Baht 13.42allowance million. Asallowance As at As31 atatDecember 31 31December December 2015, 2015, 2015, theloss the Group theGroup Group provided provided provided allowance allowance for for asset forasset asset revaluation revaluation revaluation of Baht of ofBaht Baht 92.13 92.13 92.13 million million million andand and As 31 December 2015, the provided allowance revaluation ofto Baht 92.13 millionBaht and atat31 31 December 2015, the Group has mortgaged/pledged assets amounting to approximately Baht allowance allowance allowance for impairment forimpairment impairment loss loss loss ofGroup Baht of ofBaht Baht 13.42 13.42 13.42 million. million. million. for asset As As atat 31for December December 2015, 2015, the the Group Group has has mortgaged/pledged mortgaged/pledged assets assets amounting amounting toapproximately approximately Baht allowance for impairment loss of Baht 13.42 million. 14,997 million (2014: Baht 50,532 million) (the Company: Baht 14,659 million (2014: Baht 15,155 As at 31 December 2015, the Group has mortgaged/pledged assets amounting to(2014: approximately Baht 14,997 14,997 million million (2014: (2014: Baht Baht 50,532 50,532 million) million) (the (theCompany: Company:Baht Baht 14,659 14,659 million million (2014:Baht Baht15,155 15,155 million)) collateral against bank overdrafts, short-term loans and long-term loans from financial 14,997 million (2014: Baht 50,532 million) (the Company: Baht 14,659 million (2014: Baht 15,155 As As at As31 atat 31 December 31 December December 2015, 2015, 2015, the the the Group Group Group has has has mortgaged/pledged mortgaged/pledged mortgaged/pledged assets assets assets amounting amounting to approximately toto approximately approximately Baht Baht Baht million)) million)) asas as collateral collateral against against bank bank overdrafts, overdrafts, short-term short-term loans loans and andamounting long-term long-term loans loans from from financial financial As at million 31million December 2015, the50,532 Group has mortgaged/pledged assets amounting to approximately Baht institutions, and letter guarantee for electricity, port and goods warehouse, as described Note 15. million)) asand collateral against bank overdrafts, short-term loans and long-term loans from financial 14,997 14,997 14,997 million (2014: (2014: (2014: Baht Baht Baht 50,532 50,532 million) million) million) (the(the (the Company: Company: Company: Baht Baht Baht 14,659 14,659 14,659 million million million (2014: (2014: (2014: Baht Baht Baht 15,155 15,155 15,155 institutions, institutions, and letter letter ofof of guarantee guarantee for for electricity, electricity, port port and and goods goods warehouse, warehouse, as as described described inin in Note Note 15. 15. 14,997 million (2014: 50,532 million) (the Company: Baht 14,659 million (2014: Baht 15,155 institutions, letteragainst ofBaht guarantee for electricity, port andloans goods warehouse, as loans described in Note 15. million)) million)) million)) as collateral as asand collateral collateral against against bank bank bank overdrafts, overdrafts, overdrafts, short-term short-term short-term loans loans and and and long-term long-term long-term loans loans from from from financial financial financial million)) as against bank overdrafts, short-term loans and long-term loans in from financial Measurement of fair value Measurement Measurement of of fair fair value institutions, institutions, institutions, andcollateral and and letter letter letter ofvalue guarantee of ofguarantee guarantee for for electricity, for electricity, electricity, port port port andand and goods goods goods warehouse, warehouse, warehouse, as described as asdescribed described Note ininNote Note 15.15. 15. institutions, andofletter guarantee for electricity, port and goods warehouse, as described in Note 15. Measurement fair of value Fair value hierarchy Fair Fair value value hierarchy hierarchy Measurement Measurement Measurement of fair of offair fair value value value Measurement of fair value Fair value hierarchy The fair value property, plant and equipments was determined by external, independent property Fair Fair Fair value value value hierarchy hierarchy hierarchy The The fair fair value value ofof ofproperty, property,plant plantand andequipments equipmentswas wasdetermined determinedby byexternal, external,independent independentproperty property Fair value hierarchy valuers, having appropriate recognised professional qualifications and recent experience the location The fair value of property,recognised plant andprofessional equipments was determined by external, independent property valuers, valuers, having having appropriate appropriate recognised professional qualifications qualifications and and recent recent experience experience inin in the the location location and category the property being valued. The independent valuers provide the fair value of the valuers, having appropriate recognised professional qualifications andby recent experience the location The The The fair fair fair value value value property, of of property, property, plant plant plant andand and equipments equipments equipments was was was determined determined determined by external, by external, external, independent independent independent property property property and and category category ofof of the the property property being being valued. valued. The The independent independent valuers valuers provide provide the the fair fairin value value of ofthe the The fair value property, plant andprofessional equipments was determined by recent external, independent property Group’s and the Company’s property, plant and equipments on annual basis. and category ofof the property being valued. The independent valuers provide the fair value of the valuers, valuers, valuers, having having having appropriate appropriate appropriate recognised recognised recognised professional professional qualifications qualifications qualifications and and and recent recent experience experience experience in the inin the location the location location Group’s Group’s and and the the Company’s Company’s property, property, plant plant and and equipments equipments on on anan an annual annual basis. basis. valuers, having appropriate recognised professional qualifications and recent experience in value the location Group’s andofthethe property, plant andThe equipments onvaluers anvaluers annual basis. and and and category category category of ofCompany’s the the property property property being being being valued. valued. valued. The The independent independent independent valuers provide provide provide the the the fairfair fair value value of the of of the the 6464 64 64 and category of property beingplant valued. The independent valuers provide Group’s Group’s Group’s andand and the the Company’s thethe Company’s Company’s property, property, property, plant plant andand and equipments equipments equipments on an on onannual an anannual annual basis. basis. basis. the fair value of the Group’s and the Company’s property, plant and64 equipments on an annual basis. 64 64 64 64


222

Statement of financial position Decrease in property, plant and equipment Decrease in deferred tax liabilities Notes tointherevaluation Financial Statements Decrease surplus Decrease in total equity

(in thousand Baht) 5,224,319 5,014,290 1,044,864 1,002,858 Annual Report 2015 4,179,455 Sahaviriya Steel Industries Public Company Limited 4,011,432 4,179,455 4,011,432

As at 31 December 2015, the Group provided allowance for asset revaluation of Baht 92.13 million and allowance for impairment loss of Baht 13.42 million. As at 31 December 2015, the Group has mortgaged/pledged assets amounting to approximately Baht 14,997 million (2014: Baht 50,532 million) (the Company: Baht 14,659 million (2014: Baht 15,155 million)) as collateral against bank overdrafts, short-term loans and long-term loans from financial institutions, and letter of guarantee for electricity, port and goods warehouse, as described in Note 15. Measurement of fair value Fair value hierarchy

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Sahaviriya Sahaviriya Industries Industries Public Public Company Limited, Limited, its Subsidiaries its by Subsidiaries TheSteel fairSteel value of property, plant and Company equipments was determined external, independent property Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Venture Joint Venture andand its Joint itsvaluers, Joint Venture having appropriate recognised recent experience in the location Sahaviriya Steel Industries Publicprofessional Companyqualifications Limited, and its Subsidiaries and its Joint Venture Notes tocategory the financial statements Notes Notes to the to the financial financial statements statements and of the property being valued. The independent valuers provide the fair value of the and itstoJoint Venture Notes the financial statements Group’s and the Company’s property, plant and equipments on an annual basis.

Notes to the financial statements

64Company’s fair value measurement for Group’s Company’s property, plant and equipments The The fairThe fair value value measurement measurement for the for Group’s the the Group’s and and theand the the Company’s property, property, plantplant and and equipments equipments of of of Baht 16,853_million and Baht_15,079_million, have been categorised a3 Level 3 fair The fair valueand measurement for the Group’s andrespectively thehave Company’s property, plant and equipments of BahtBaht 16,853_million 16,853_million and Baht_15,079_million, Baht_15,079_million, respectively respectively have been been categorised categorised as aasLevel aasLevel fair 3 fair The fair value for Group’s andused. the Company’s plant andasequipments of value based onmeasurement thetoinputs to the the valuation technique used. Baht 16,853_million and Baht_15,079_million, respectively have property, been categorised a Level 3 fair valuevalue based based on the oninputs the inputs the tovaluation the valuation technique technique used. Baht and Baht_15,079_million, respectively have been categorised as a Level 3 fair value16,853_million based on the inputs to the valuation technique used. value based on the inputs to the valuation technique used. Valuation technique and significant unobservable inputs Valuation Valuation technique technique and and significant significant unobservable unobservable inputs inputs Valuation technique and significant unobservable inputs technique andthe significant unobservable In December 2012, Group/Company engaged an independent professional valuer to revalue In December InValuation December 2012, 2012, the Group/Company the Group/Company engaged engaged an inputs independent an independent professional professional valuer valuer to revalue to revalue its its its property, plant and equipments. The company engages external independent and qualified torevalue determine In December 2012, the The Group/Company engaged an independent professional valuer its property, property, plant plant and and equipments. equipments. The company company engages engages external external independent independent and and qualified qualified to determine totodetermine In December 2012, the Group/Company engaged an independent professional valuer to revalue its the fair value every five years or when there are significant changes in fair value. There is no gain property, plant and equipments. The company engages external independent and qualified to determine the fair the fair valuevalue every every five five yearsyears or when or when therethere are significant are significant changes changes in fair in fair value. value. There There is noisgain no gain or or or property, plant and equipments. The company engages external independent and qualified to determine losses for the period included in profit or loss that in attributable to these assets held at the end of the the fair value every five years or when there are significant changes in fair value. There is no or losses losses for the for period the period included included in profit in profit or loss or loss that that in attributable in attributable to these to these assets assets heldheld at the at end the end of the ofgain the the fair value every five years or when there are significant changes in fair value. There is no gain or reporting period that is included in gain (losses) recognised in other income. losses for the period included in profit or loss that in attributable to these assets held at the end of the reporting reporting period period that that is included is included in gain in gain (losses) (losses) recognised recognised in other in other income. income. losses for the period in profit loss that in attributable to income. these assets held at the end of the reporting period thatincluded is included in gainor(losses) recognised in other reporting period that is included in gain (losses) recognised in other income. The following table shows the valuation technique used in measuring the fair of property, The The following following tabletable shows shows the valuation the valuation technique technique usedused in measuring in measuring the fair the value fair value ofvalue property, of property, plantplant andplant and and equipments, as well as the significant unobservable inputs used. The following table shows the valuation technique used in measuring the fair value of property, plant and equipments, equipments, as well as well as the assignificant the significant unobservable unobservable inputs inputs used.used. The followingas table valuationunobservable technique used in measuring the fair value of property, plant and equipments, wellshows as thethe significant inputs used. equipments, as well as the significant unobservable inputs used. Valuation technique Valuation Valuation technique technique Valuation technique Valuation technique

Land LandLand - Sales comparison approach Land - Sales - Sales comparison comparison approach approach Land - Sales comparison approach - Sales comparison Land improvementapproach LandLand improvement improvement Building building improvements Land Building Building and improvement building and and building improvements improvements Land improvement Machinery equipment Building andand building improvements Machinery Machinery and equipment and equipment andand building improvements - Depreciated replacement cost approach Machinery equipment - Depreciated - Building Depreciated replacement replacement cost cost approach approach Machinery and equipment - Depreciated replacement cost approach - Depreciated replacement cost approach

unobservable inputs Significant unobservable unobservable inputs inputs Significant Significant Significant unobservable inputs Significant unobservable inputs

 sales Recent  Recent  Recent salessales  Recent sales  Recent sales

 of Listing of comparable property  Listing  Listing comparable of comparable property property  Listing of comparable property  Cost of reproducing or replacing the property  Cost  Cost of reproducing of reproducing or replacing or replacing the property the property   Listing comparableor property Cost ofofreproducing replacing the property  Cost of reproducing or replacing the property

In the 2015, the management performed of impairment of the Company’s property, plant In 2015, In 2015, the management management performed performed teststests of tests impairment of impairment of the of the Company’s Company’s property, property, plantplant and and and by using value cost todetermine sell toimpairment determine the amount. The company has Inequipments 2015, theusing management performed tests of recoverable the amount. Company’s property, plant equipments equipments by using by fair value fair fair value less less costless cost to sell to to sell toofdetermine the recoverable the recoverable amount. The The company company has hasand Inequipments 2015, management performed tests impairment ofsuch the Company’s property, plant and also engaged an independent professional valuer to determine such fair value less cost to sell. The by using fair value less cost to sell to the recoverable amount. has also also engaged engaged anthe independent an independent professional professional valuer valuer toof determine todetermine determine such fair fair value value less less cost cost toThe sell. tocompany sell. The The equipments bythe using fair value less cost sell to determine the recoverable amount. The company has valuer above valuation technique and key asabove, stated above, tocost measure the fair also engaged anvaluation independent professional valuer to assumptions, determine fairabove, value tofair sell. The valuer valuer used used theused above the above valuation technique technique andtoand key key assumptions, assumptions, as stated assuch stated to measure toless measure the the fair also engaged an independent professional valuer to determine such fair value less cost to sell. The value. used the above valuation technique and key assumptions, as stated above, to measure the fair valuer value. value. valuer value.used the above valuation technique and key assumptions, as stated above, to measure the fair value.

14Deferred Deferred 14 14Deferred tax tax tax 14 Deferred tax 14 Deferred Deferred taxand assets liabilities 31 December as follows: Deferred Deferred tax assets tax tax assets liabilities and and liabilities as atas31atas December 31atDecember werewere as were follows: as follows:

Deferred tax assets and liabilities as at 31 December were as follows: Deferred tax assets and liabilities as at 31 December were as follows: financial statements Consolidated Consolidated Consolidated financial financial statements statements Assets Liabilities Consolidated financial statements Assets Assets Liabilities Liabilities Consolidated statements 2015 Liabilities 201520152015 Assets 201420142014 financial 20152015 201420142014 (in thousand Baht) 2015 Assets 2014 2015Liabilities 2014 (in thousand (in thousand Baht)Baht) 2015 2014 2015 2014 Total (1,168,229) (3,229,042) 51,913 2,045,142 (in thousand Baht) (3,229,042) TotalTotal (1,168,229) (1,168,229) (3,229,042) 51,913 51,913 2,045,142 2,045,142 (in thousand Baht) Set offtax of tax (6,791) (2,012,865) 6,7912,012,865 2,012,865 Total (1,168,229) (3,229,042) 51,913 2,045,142 Set off Setof offtax of (6,791) (6,791) (2,012,865) (2,012,865) 6,791 6,791 2,012,865 Total (1,168,229) (3,229,042) 51,913 2,045,142 Set off of tax (6,791) (2,012,865) 6,791(1,216,177) 2,012,865 Net deferred assets (liabilities) 45,122 45,122 32,277 32,277 (1,161,438) (1,216,177) Net Net deferred deferred tax assets tax tax assets (liabilities) (liabilities) 45,122 32,277 (1,161,438) (1,161,438) (1,216,177)


Valuation technique Machinery and equipment  Cost of Significant reproducingunobservable or replacinginputs the property Land improvement - Depreciated replacement cost approach Building and building improvements  Listing of comparable property Land Machinery and equipment Cost of sales reproducing or replacing the property - Sales comparison approach  Recent Annual Report 2015 - Depreciated replacement cost approach Notes2015, to the Financial Statements In the management performed tests of Sahaviriya impairment property, plant and 223 Steel Industriesof Public the CompanyCompany’s Limited Land improvement equipments by using fair value less cost to sell to determine the recoverable amount. The company has Building and building improvements  Listingsuch of comparable also engaged an independent professional valuer to determine fair value property less cost to sell. The In 2015, and the equipment management performed tests of impairment the Company’s property, and Machinery  Cost of of reproducing or replacing theplant property valuer used the above valuation technique and key assumptions, as stated above, to measure the fair equipments using fair value less cost to sell to determine the recoverable amount. The company has -value. Depreciatedby replacement cost approach also engaged an independent professional valuer to determine such fair value less cost to sell. The valuer used the above valuation technique and key assumptions, as stated above, to measure the fair 14 Deferred tax value. In 2015, the management performed tests of impairment of the Company’s property, plant and equipments using value less sell to determine the recoverable amount. The company has Deferred tax by assets andfair liabilities as atcost 31 to December were as follows: 14 Deferred taxan independent professional valuer to determine such fair value less cost to sell. The also engaged valuer used the above valuation technique and key Consolidated assumptions, as stated above, to measure the fairBaht Unit: Thousand financial statements Deferred were as follows: value. tax assets and liabilities as at 31 December Assets Consolidated financial statements Liabilities 2015 2014 2015 2014 Consolidated financial statements Assets Liabilities 14 Deferred tax (in thousand Baht) Assets Liabilities 51,913 2015 2014 2015 2014 Total (1,168,229) (3,229,042) 2,045,142 2015 2014 2015 2014 Deferred tax assets and liabilities as at 31 December as follows: Set off of tax (6,791) were (2,012,865) 6,791 2,012,865 (in thousand Baht) Net deferred tax assets (liabilities) 45,122 32,277 (1,161,438) (1,216,177) Total (1,168,229) 51,913 Consolidated 2,045,142 financial statements (3,229,042) Set off of tax (6,791)Assets(2,012,865) 6,791 Liabilities2,012,865 Separate financial(1,161,438) statements Net deferred tax assets (liabilities) 45,122 32,277 2015 Assets 2014 2015Liabilities(1,216,177) 2014 (in thousand Baht) 2015 2014 2015 2014 Separate financial statements Total (3,229,042) 51,913 2,045,142 (in thousand (1,168,229) Baht) Assets(2,012,865) Liabilities2,012,865 Set off of tax 6,791 Deferred tax liabilities -(6,791) (1,091,093) (1,142,080) Unit:2014 Thousand Baht 2015 2014 2015 Net deferred tax assets (liabilities) 45,122 32,277 (1,161,438) (1,216,177) (in thousand Separate financialBaht) statements Deferred tax liabilities (1,091,093) (1,142,080) Separate financial statements Assets Liabilities Assets Liabilities 2015 2015 2014 2015 2014 2014 2015 2014 65 (in thousand Baht) Deferred tax liabilities (1,091,093) (1,142,080) 65

65


224

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes to the Financial Statements

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Notes to the financial and its Joint Venturestatements Sahaviriya Steel Industries Notes to the financial statementsPublic Company Limited, its Subsidiaries and its Joint Venture Movements of deferred tax assets and liabilities during the year were as follows: Notes to the financial statements

Movements of deferred tax assets and liabilities during the year were as follows: Consolidated financial statements Consolidated financial statements (Charged) / Credited to: Movements of deferred tax assets and liabilities during the year were as follows: Consolidated financial statements At 1 Other (Charged) / Credited to: January Profit or comprehensive Exchange Consolidated financial At 1 Other statements Note January 2015 loss income differences (Charged) Credited to: Profit or /comprehensive Exchange (in thousand Baht) At 1 Other Note 2015 loss income differences Deferred tax assets Note January Profit or (in comprehensive thousand Baht) Exchange Trade receivable Note 2015 981 loss 38 incomedifferences Deferred tax assets Inventories 19 Trade receivable 981 38 (in thousand - Baht) -Property, plant and Deferred tax assets Inventories 19 equipment 7,473 5,509 Trade receivable 981 38 --Property, plant and Employee benefit Inventories 19 equipment 7,473 5,509 obligations 9,667 468 Property, plant and Employee benefit Tax loss carry forward 22,460 5,298 equipment 7,473 5,509 obligations 9,667 468 --Capital allowance Employee benefit Tax loss carry forward 22,460 5,298 under UK law 2,004,542 (475,767) 169,835 obligations 9,667 468 ) -Capital allowance Total 2,045,142 (464,454) 169,835 Tax lossUK carry forward 22,460 5,298) ) -under law 2,004,542 (475,767) 169,835 Derecognition of Capital allowance Total 2,045,142 (464,454)) 169,835 deferred under UK tax law 2,004,542 (475,767)) 169,835 Derecognition ofassets following liquidation Total 2,045,142 (464,454)) 169,835 deferred tax assets of subsidiary 2(e) Derecognition of following liquidation Net deferred tax assets of subsidiary 2(e) following liquidation Net Deferred tax liabilities 2(e) of subsidiary Other current assets (554) 357 Net Deferred tax liabilities Property, plant and Other current assets (554) 357 equipment (3,210,960) 474,010 54,437 (169,835)) Deferred tax liabilities Property, plant and Long-term Other currentloans assetsfrom (554) 357 equipment (3,210,960) 474,010 54,437 (169,835) ) financial institutions (14,874) 2,548 Property, plant Long-term loansand from Finance lease liabilities (2,654) 474,010 686 equipment (3,210,960) 54,437 (169,835) financial institutions (14,874) 2,548 --- ) Total lease (3,229,042) 477,601 (169,835) ) Long-term loans from Finance liabilities (2,654) 686 -54,437 financial institutions (14,874) 2,548 Derecognition of Total (3,229,042) 477,601 54,437 (169,835)) deferred Finance leasetax liabilities (2,654) 686 Derecognition of liabilities Total (3,229,042) 477,601 54,437 (169,835)) deferred taxfollowing liquidation of Derecognition of liabilities following subsidiary 2(e) deferred taxof liquidation Net liabilities following subsidiary 2(e) liquidation of Net subsidiary 2(e) Net

66 66 66

At 31 December At 31 2015 December

At 31 2015 December 20151,019 1,01919 19 12,982 1,019 19 12,982 10,135 27,758 12,982 10,135 27,758 1,698,610 10,135 1,750,523 27,758 1,698,610

1,750,523 1,698,610 1,750,523 (1,698,610) 51,913 (1,698,610)

51,913 (1,698,610) (197) 51,913 (197) (2,852,348) (197) (2,852,348) (12,326) (1,968) (2,852,348) (12,326) (2,866,839) (1,968) (12,326) (2,866,839) (1,968) (2,866,839) 1,698,610 (1,168,229) 1,698,610 (1,168,229) 1,698,610 (1,168,229)


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes to the Financial Statements

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture Sahaviriya Steel Industries Notes to the financial statementsPublic Company Limited, its Subsidiaries and its Joint Venture Notes to the financial statements

Deferred tax assets Trade receivable Deferred tax assets Inventories Trade receivable Other current assets Inventories Property, plant and equipment Other current assets Employee benefit obligations Property, plant and equipment Tax loss carry forward Employee benefit obligations Capital allowances under UK Act Tax loss carry forward Total Capital allowances under UK Act Total Deferred tax liabilities Other current assets Deferred tax liabilities Property, plant and equipment Other current assets Long-term loans from financial Property, plant and equipment institutions Long-term loans from financial Finance lease liabilities institutions Total Finance lease liabilities Total

Consolidated financial statements Consolidated financial statements (Charged) / Credited to: Consolidated financial statements Other (Charged) / Credited to: Profit or comprehensive Exchange Other loss income differences Profit or (in comprehensive thousand Baht) Exchange loss income differences

At 1 January At 1 2014 January 2014

444 -201 444 730 201 9,095 -730 9,095 1,652,493 1,662,963 1,652,493 1,662,963 (149) (2,907,500) (149) (2,907,500) (14,874) (1,904) (14,874) (2,924,427) (1,904) (2,924,427)

Deferred tax liabilities Property, plant and equipment Deferred tax liabilities Long-term loans from financial institutions Property, plant and equipment Total Long-term loans from financial institutions Total

Deferred tax liabilities Property, plant and equipment Deferred tax liabilities Long-term loans from financial institutions Property, plant and equipment Total Long-term loans from financial institutions Total

981 (in thousand - Baht) (425) 981 (201) (425) 6,743 (201) 1,086 (514) 6,743 22,460 1,086 (514) 366,135 (14,086) 22,460 396,779 (514) (14,086) 366,135 (14,086) 396,779 (514) (14,086) (405) (365,726) 48,180 14,086 (405) (365,726) 48,180 14,086 (750) (366,881) 48,180 14,086 (750) (366,881) Separate 48,180 14,086 financial statements

(Charged) / credited to: Separate financialOther statements At 1 (Charged) / credited to: January Profit or comprehensive At 1 Other 2015 loss income January Profit comprehensive (inor thousand Baht) 2015 loss income (in thousand Baht) (1,127,206) (2,399) 50,838 (14,874) 2,548 (1,127,206) (2,399) 50,838 149 (1,142,080) (14,874) 2,548 (1,142,080) Separate149 50,838 financial statements (Charged) / credited to: Separate financialOther statements At 1 (Charged) credited to: January Profit or /comprehensive At 1 Other 2014 loss income January Profit comprehensive (inor thousand Baht) 2014 loss income (in- thousand Baht) (1,170,829) 43,623 (14,874) (1,170,829) (1,185,703) 43,623 (14,874) (1,185,703) 43,623

67 67

225

At 31 December At 31 2014 December 2014

981 19 - 981 19 7,473 -9,667 7,473 22,460 9,667 2,004,542 22,460 2,045,142 2,004,542 2,045,142 (554) (3,210,960) (554) (3,210,960) (14,874) (2,654) (14,874) (3,229,042) (2,654) (3,229,042)

At 31 December At 31 2015 December 2015 (1,078,767) (12,326) (1,078,767) (1,091,093) (12,326) (1,091,093) At 31 December At 31 2014 December 2014 (1,127,206) (14,874) (1,127,206) (1,142,080) (14,874) (1,142,080)


Trade receivable Property, plant and equipment Capital allowances under UK Act Inventories Employeetax benefit Deferred assetsobligations Total Other current Tax loss carryassets forward Trade receivable Property, plant and under equipment Capital allowances UK Act Inventories Deferred tax liabilities Employee benefit obligations Total Other current assets Notes toassets the Financial Statements 226Other current Tax loss carry forward Property, plant and equipment Property, plant and under equipment Capital allowances UK Act Deferred liabilities Employeetax benefit obligations Long-term loans from financial Total Other current Tax loss carryassets forward institutions Property, plant and under equipment Capital allowances UK Act Finance lease liabilities Deferred tax liabilities Long-term loans from financial Total Total Other current assets institutions Property, plantliabilities and equipment Finance Deferredlease tax liabilities Long-term loans from financial Total Other current assets institutions Property, plant and equipment Finance lease liabilities Long-term loans from financial Total institutions Finance lease liabilities Total Deferred tax liabilities

-730 1,652,493 444 9,095 1,662,963 --201 730 1,652,493 444 9,095 1,662,963 201 (149) 730 (2,907,500) 1,652,493 9,095 1,662,963 (149) (14,874) (2,907,500) 1,652,493 (1,904) 1,662,963 (2,924,427) (149) (14,874) (2,907,500) (1,904)

981 --6,743 (in thousand 366,135 - Baht) (14,086) (425) -1,086 (514) 396,779 (514) (14,086) (201) -22,460 981 -6,743 366,135 (14,086) (425) -1,086 (514) Annual Report 2015 396,779 (14,086) (201) -(514) Public Company Limited (405) Sahaviriya Steel Industries 22,460 6,743 (365,726) 48,180 14,086 366,135 (14,086) 1,086 (514) 396,779 (14,086) (405) -(514) 22,460 -(365,726) 48,180 14,086 366,135 (14,086) (750) 396,779 (514) (14,086) (366,881) 48,180 14,086 (405) -- financial statements Separate (365,726) 48,180 14,086 (750) -

Separate financial statements 48,180 14,086 (Charged) / credited-- to: 48,180 14,086 Other Separate financial statements Profit or comprehensive 48,180 14,086 (Charged) / credited- to: loss income Other (in thousand Baht) Separate statements Profit orfinancial comprehensive 48,180 14,086 (Charged) / credited to: 2015 loss income Property, plant and equipment (1,127,206) (2,399) 50,838 At 1 Other (in thousand financial Baht) statements Long-term loans from financial institutions (14,874) Separate 2,548 January Profit or comprehensive Deferred tax liabilities (Charged) / credited to: 149 Total (1,142,080) 50,838 2015 loss income Property, plant and equipment (1,127,206) (2,399) 50,838 At 1 Other (in thousand Baht) Long-term loans from financial institutions (14,874) 2,548 January Profit orfinancial comprehensive Separate statements Deferred tax liabilities 149 Total (1,142,080) 50,838 2015 loss income (Charged) to: Property, plant and equipment (1,127,206) (2,399) / credited 50,838 (in thousand Other Baht) At 1 Long-term loans from financial institutions (14,874) 2,548 Separate financial statements Deferred tax liabilities January Profit or /comprehensive 149 Total (1,142,080) 50,838 (Charged) to: Property, plant and equipment (1,127,206) (2,399) 50,838 Separate financialcredited statements 2014 loss income At 1 Other Long-term loans from financial institutions (14,874) 2,548 (in thousand Baht) Separate statements January Profit149 orfinancial comprehensive Total (1,142,080) 50,838 Deferred tax liabilities (Charged) / credited 2014 loss incometo: Property, plant and equipment (1,170,829) 43,623 At 1 Other (in thousand Baht) statements - orfinancial Long-term loans from financial institutions (14,874) Separate January Profit comprehensive Deferred tax liabilities (Charged) / credited to: Total (1,185,703) 43,623 2014 loss income Property, plant and equipment (1,170,829) 43,623 At 1 Other (in thousand Baht) Long-term loans from financial institutions (14,874) January Profit- or comprehensive Deferred tax liabilities Total (1,185,703) 43,623 2014 loss income Property, plant and equipment (1,170,829) 43,623 (in thousand Baht) Long-term loans from financial institutions (14,874) Deferred Steel tax liabilities Sahaviriya Industries Public Company Limited, its Subsidiaries Total (1,185,703) 43,623 Property, plant and equipment (1,170,829) 43,623 and its Joint Venture Sahaviriya Company Limited, Long-termSteel loans Industries from financial Public institutions (14,874) its Subsidiaries Notes to the financial statementsPublic Company Sahaviriya Steel Industries Limited, its Subsidiaries Total (1,185,703) 43,623 and its Joint Venture (2,924,427) (149) (14,874) (2,907,500) (1,904) (2,924,427) (14,874) (1,904) (2,924,427)

and Venture Notesits to Joint the financial statements

67

Notes to the financial statements

15 15 15

(366,881) (405) (365,726) At(750) 1 January (366,881) 2015 At(750) 1 January (366,881)

981 7,473 2,004,542 19 9,667 2,045,142 22,460 981 7,473 2,004,542 19 9,667 2,045,142 (554) 22,460 7,473 (3,210,960) 2,004,542 9,667 2,045,142 (554) 22,460 (14,874) (3,210,960) 2,004,542 (2,654) 2,045,142 (3,229,042) (554) (14,874) (3,210,960) (2,654)

(3,229,042) (554) (14,874) (3,210,960) At 31 (2,654) December (3,229,042) (14,874) 2015 At 31 (2,654) December (3,229,042)

2015 (1,078,767) At 31 (12,326) December (1,091,093) 2015 (1,078,767) At 31 (12,326) December (1,091,093) 2015 (1,078,767) At 31 (12,326) December (1,091,093) (1,078,767) 2014 At 31 (12,326) December (1,091,093) 2014 (1,127,206) At 31 (14,874) December (1,142,080) 2014 (1,127,206) At 31 (14,874) December (1,142,080) 2014 (1,127,206) (14,874) (1,142,080) (1,127,206) (14,874) (1,142,080)

Deferred tax assets (liabilities) arising from temporary differences and unused tax losses that have not been recognised in the financial statements as at 3167December were as follows: Deferred tax assets (liabilities) arising from temporary differences and unused tax losses that have not Deferred tax assets (liabilities) fromastemporary differences unused tax losses that have not been recognised in the financialarising statements at 31 December wereand as follows: Consolidated Separate 67December were as follows: Unit: Thousand Baht been recognised in the financial statements asfinancial at 31 statements financial statements Consolidated financial2014 statements Separate financial statements 2015Consolidated 2015 Separate 2014 Consolidated Separate financial statements financial statements (in thousand Baht) 67 2015 2014 2015 2014 financial statements financial statements 2015 2014 2015 2014 Deferred tax assets 2015 2014 2015 2014 (in thousand13,295,413 Baht) - Deductible temporary differences 13,211,689 816,306 484,665 (in thousand Baht) Deferred tax assets - Tax losses 1,648,496 5,615,336 1,648,496 1,080,258 Deferred tax liability assets - Deductible temporary differences 13,211,689 816,306 13,295,413 484,665 Deferred tax Deductible temporary differences differences 13,211,689 816,306 13,295,413 484,665 Tax losses temporary 1,648,496 5,615,336 1,648,496 1,080,258 --- Deductible (4,544) (4,544) Tax losses 1,648,496 5,615,336 1,648,496 1,080,258 Deferred tax liability Net 14,860,185 6,427,098 14,943,909 1,560,379 Deferred tax liability - Deductible temporary differences (4,544) (4,544) Deductible temporary differences (4,544) (4,544) Net 14,860,185 6,427,098 14,943,909 1,560,379 Tax losses of subsidiaries in Thailand will expire in 2016-2017. Meanwhile, tax losses of the UK Net 14,860,185 6,427,098 14,943,909 1,560,379 subsidiary will not expire. The deductible temporary differences do not expire under current tax Tax losses The of subsidiaries in Thailand expiretax in assets 2016-2017. Meanwhile, tax losses of ittheis UK legislation. Group has not recognisedwill deferred in respect of these items because not Tax losses of subsidiaries in Thailand will expire in 2016-2017. Meanwhile, tax losses subsidiary will not expire. The deductible temporary differences do not expire under current tax probable that future taxable profit against which the Group can utilise the benefits therefrom.of the UK subsidiary not expire. The deductible temporary differences do ofnot expire current tax legislation. will The Group has not recognised deferred tax assets in respect these itemsunder because it is not legislation. The Group has not recognised deferred tax assets in respect of these items because it is not probable that futureliabilities taxable profit against which the Group can utilise the benefits therefrom. Interest-bearing probable that future taxable profit against which the Group can utilise the benefits therefrom.

Interest-bearing liabilities Interest-bearing liabilities

Note Note Current Note Bank overdraft and short term loan

Consolidated Separate financial statements financial statements 2015Consolidated 2014 2015 Separate 2014 Consolidated Separate financial statements financial statements (in thousand Baht) financial statements financial statements 2015 2014 2015 2014 2015 2014 2015 2014 (in thousand Baht) (in thousand Baht)


15

15

(in thousand Baht) - Deductible temporary differences 13,211,689 816,306 13,295,413 484,665 Deferred tax assets - Tax losses 1,648,496 5,615,336 1,648,496 1,080,258 - Deductible temporary differences 13,211,689 816,306 13,295,413 484,665 Deferred tax liability - Tax losses 1,648,496 5,615,336 1,648,496 1,080,258 - Deductible temporary differences (4,544) (4,544) Deferred tax liability Annual Report 2015 6,427,098 Net 14,860,185 14,943,909 1,560,379 - Deductible -Sahaviriya Steel Industries Public (4,544) (4,544) Notes to the Financialtemporary Statements differences 227 Company Limited Net 14,860,185 6,427,098 14,943,909 1,560,379 Tax losses of subsidiaries in Thailand will expire in 2016-2017. Meanwhile, tax losses of the UK subsidiary will not expire. The deductible temporary differences do not expire under current tax Tax losses of subsidiaries in Thailand will expire in 2016-2017. Meanwhile, tax losses of the UK legislation. The Group has not recognised deferred tax assets in respect of these items because it is not subsidiary will not expire. The deductible temporary differences do not expire under current tax probable that future taxable profit against which the Group can utilise the benefits therefrom. legislation. The Group has not recognised deferred tax assets in respect of these items because it is not probable that future taxable profit against which the Group can utilise the benefits therefrom.

Interest-bearing liabilities

Interest-bearing liabilities

Current Bank overdraft and short term loan Current from financial institution Bank overdraft and short term loan - unsecured from financial institution - secured - unsecured Total - secured

Total Short-term loans from related parties - unsecured Short-term loans from related Current portion of long-term loans parties - unsecured from financial institutions Current portion of long-term loans - secured from financial institutions Long-term borrowings classified as - secured current liabilities - secured Long-term borrowings classified as Subordinated convertible current liabilities - secured debentures Subordinated convertible Current portion of finance lease debentures liabilities Current portion of finance lease Current portion of liabilities under liabilities hire purchase agreements Current portion of liabilities under Total current hire interest purchasebearing agreements liabilities Total interest bearing current liabilities

Consolidated Separate Unit: Thousand Baht financial statements financial statements Consolidated Separate Consolidated financial 2014 statements Separate financial statements Note 2015 2015 2014 financial statements financial statements (in thousand Baht) 2015 2014 2015 2014 Note Note 2015 2014 2015 2014 (in thousand Baht) 128,562 12,030,538 128,562 12,159,100 12,030,538

305,069 21,936,988 305,069 22,242,057 21,936,988

11,888,671 11,888,671 11,888,671

11,906,775 11,906,775 11,906,775

637,000

396,294

645,000

41,460

12,159,100 4 4

22,242,057

11,888,671

11,906,775

637,000

396,294

645,000

41,460

7,033,461

7,639,329

7,033,461

5,736,332

7,033,461 6,629,285 6,629,285 -

68,763

68,763 3,630

3,630 26,531,239

26,531,239

68 68

7,639,329 22,034,034

22,034,034 236

236 54,692

54,692 6,602

6,602 52,373,244

52,373,244

7,033,461 6,629,285

5,736,332 7,916,544

-

-

6,629,285 -

2,912

2,912 26,199,329

26,199,329

7,916,544 236 236

4,732

4,732 25,606,079

25,606,079


228

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes to the Financial Statements

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its JointSteel Venture Sahaviriya Industries Public Company Limited, its Subsidiaries Notes to the financial statements and its Joint Venture Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Notes to the financial statements and its Joint Venture Notes to the financial statements

Note Note

Unit: Thousand Baht Consolidated Separate Consolidated financial statements Separate financial statements financial statements financial statements Consolidated 2014 Separate 2014 2015 2015 2015 2014 2015 2014 financial statements financial statements (in thousand Baht) 2015Consolidated 2014 2015 Separate 2014 financial statements financial statements (in thousand Baht) 72,005 98,227 2015 2014 2015 2014 (in thousand Baht) 72,005 98,227 1,003 3,338 843 2,460

Note Non-current Finance lease liabilities Note Non-current Liabilities under hire purchase Finance lease liabilities agreements Non-current Liabilities under hire purchase Total interest bearing Finance lease liabilities 72,005 98,227 - 843 -2,460 agreements 1,003 3,338 noncurrent liabilities 73,008 101,565 843 2,460 Liabilities under hire purchase Total interest bearing Total 26,604,247 52,474,809 26,200,172 25,608,539 agreements 1,003 3,338 843 2,460 noncurrent liabilities 73,008 101,565 Total interest bearing 26,604,247 52,474,809 26,200,172 25,608,539 Provision made for loss on non- current liabilities 73,008 101,565 843 2,460 guarantee given by SSI TH Total 26,604,247 52,474,809 26,200,172 25,608,539 Provision made for loss on 2(e) 29,976,133 - Loan SSI UK 29,976,133 guarantee given by SSI TH 2(e) -- made Bank guarantee 57,983 57,983 Provision loss 2(e) 29,976,133 Loanfor SSI UKon 29,976,133 Grand total 56,638,363 52,474,809 56,234,288 25,608,539 guarantee given by SSI TH 2(e) - Bank guarantee 57,983 57,983 2(e) 29,976,133 - Loan SSI UK 29,976,133 Grand total 56,638,363 52,474,809 56,234,288 25,608,539 The periods to maturity of interest-bearing 2(e) liabilities, - Bank guarantee 57,983 excluding -finance lease liabilities 57,983and liabilities under hire purchase agreements, as at 31 December were as follows: Grand total 56,638,363 52,474,809 56,234,288 25,608,539 The periods to maturity of interest-bearing liabilities, excluding finance lease liabilities and liabilities under hire purchase agreements, as at 31 December were as follows: Consolidated Thousand Baht The periods to maturity of interest-bearing liabilities, excluding finance lease liabilitiesSeparate andUnit: liabilities financial statements financial statements under hire purchase agreements, as at 31 December were as follows: Consolidated Separate Consolidated financial2014 statements Separate 2015 2015 financial statements 2014 financial statements financial statements (in thousand Baht) 2015 2015 2014 2015 2014 Consolidated2014 2015 Separate 2014 Within one year 26,458,846 52,311,950 26,196,417 25,601,347 financial statements financial statements (in thousand Baht) Total 26,458,846 52,311,950 26,196,417 25,601,347 2015 2014 2015 2014 Within one year 26,458,846 52,311,950 26,196,417 25,601,347 (in thousand Baht) Total 26,458,846 52,311,950 26,196,417 25,601,347 Secured interest-bearing liabilities as at 31 December were secured on the following assets: Within one year 26,458,846 52,311,950 26,196,417 25,601,347 Total 26,458,846were secured 52,311,950 26,196,417 25,601,347 Secured interest-bearing liabilities as at 31 December on the following assets: Consolidated Separate financial statements statements Secured interest-bearing liabilities as at 31 December were secured on the followingfinancial assets: Consolidated Separate 2015 2014 2015 2014 Baht Thousand financial statements financial Unit: statements (in thousand Baht) Separate 2015Consolidated 2015 financial 2014 Consolidated financial2014 statements Separate statements Property, plant and equipment 14,996,853 50,531,530 14,658,972 15,155,123 financial statements financial statements (in thousand Baht) 2015 2015 2014 2015 2014 Investments in subsidiaries and 2014 2015 2014 Property, plant and equipment 14,996,853 50,531,530 14,658,972 15,155,123 Joint venture 28,201,121 27,481,792 (in thousand Baht) Investments in subsidiaries and Inventories 1,995,942 8,798,274 1,992,092 6,402,029 Property, plant and equipment 14,996,853 50,531,530 14,658,972 15,155,123 Joint venture 28,201,121 27,481,792 Total 16,992,795 87,530,925 16,651,064 49,038,944 Investments Inventories in subsidiaries and 1,995,942 8,798,274 1,992,092 6,402,029 Joint venture 28,201,121 27,481,792 Total 16,992,795 87,530,925 16,651,064 49,038,944 Inventories 1,995,942 8,798,274 1,992,092 6,402,029 Total 16,992,795 87,530,925 16,651,064 49,038,944

69 69


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes to the Financial Statements

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Sahaviriya Sahaviriya Steel Steel Industries Industries Public Public Company Company Limited, Limited, itsits Subsidiaries Subsidiaries and its Joint Venture and and its its Joint Joint Venture Venture Sahaviriya Steel Industries Notes to the financial statementsPublic Company Limited, its Subsidiaries Notes Notes to to the the financial financial statements statements and its Joint Venture Notes to the financial statements

As at 31 December 2015, the significant long-term loan agreements of the Group are detailed as As As at at 31 31 December December 2015, 2015, thethe significant significant long-term long-term loan loan agreements agreements of of thethe Group Group areare detailed detailed as as follows: follows: follows: As at 31 December 2015, the significant long-term loan agreements of the Group are detailed as Company: Baht 23,900 million debt facility dated 24 February 2011 and as amended follows: Company: Company: Baht Baht 23,900 23,900 million million debt debt facility facility dated dated 24 24 February February 2011 2011 andand as amended as amended Company: BahtFacilities 23,900 million debt facility dated 24 February 2011 and as amended received Main conditions / Other conditions Facilities Facilities received received Main Main conditions conditions / Other / Other conditions conditions Lenders : 3 commercial banks Main conditions Facilities received Main conditions / Other conditions Lenders Lenders : 3 :commercial 3 commercial banks banks Main Main conditions conditions Facility A : Credit facility: Baht 6,200 million Lenders 3Credit commercial banks MainConsolidated conditions Debt to Equity ratio of below Facility A: :A : Credit facility: facility: Baht Baht 6,200 6,200 million million the 1)  Facility Baht term loan to partially-finance 1) 1) Consolidated Consolidated to Equity to(1.5:1 Equity ratio ratio of below of below 2:1 for 2011 Debt andDebt 2012 thereafter) Facility Baht Baht term loan loantoprice, to partially-finance partially-finance thethe A term : Credit facility: Baht 6,200 million acquisition purchase associated deal costs 2:1 2:1 for for 2011 2011 and and 2012 2012 (1.5:1 (1.5:1 thereafter) thereafter) 2) Debt ServiceDebt coverage ratioratio of ofatbelow least 1) Consolidated to Equity acquisition purchase purchase associated associated deal deal costs costs and general working capital purposes  acquisition Baht term loan price, toprice, partially-finance the 2) 2) Debt Debt Service Service coverage coverage ratio ratio ofa of at at least least 1.2:1 Testing conducted on quarterly 2:1 for 2011 and 2012 (1.5:1 thereafter) and general general working working capital capital purposes purposes acquisition purchase price, associated  and Interest rate is based on MLR and deal loancosts had 2) 1.2:1 1.2:1 Testing Testing conducted conducted on on a quarterly a quarterly basis 31 December Debt from Service coverage 2011 ratio onward of at least  Interest Interest rate rate is tenure is based based on on MLR MLR and and loan loan had had and general working capital purposes period 7 year However, this had been basis basis from from 31 31 December December 2011 2011 onward onward 3) Assets disposal, merger and acquisition 1.2:1 Testing conducted on a quarterly period 7 rate year 7foryear tenure However, this had had been been3) 3) Assets extended another 3However, years.  period Interest istenure based on MLRthis and loan had Assets disposal, disposal, merger merger and and acquisition acquisition and dividends payment basis from 31 December 2011 onward extended for another another years. 3 years.after period 7for year tenure However, thisfirst haddrawbeen 3) and  extended First repayment 273 months and dividends dividends payment payment Assets disposal, merger and acquisition  First First repayment repayment 27 27 months months after after firstfirst drawdrawextended for another 3 years. down (23 March 2011). Otherand conditions dividends payment down (23 (23 March March 2011). 2011). Other conditions conditions  down First repayment 27 months after first draw- Other Facility B : Credit facility: Baht 5,700 million down (23 March 2011). Facility B :Bterm Credit : Credit facility: facility: Baht Baht 5,700 5,700 million million OtherCommitment conditions fees as specified in the  Facility Baht loan to refinance another facility 1)1) 1) Commitment Commitmentfeesfeesas asspecified specifiedin inthethe agreements Facility Baht Baht term term loan loan to to refinance refinance another another facility facility facility: Baht 5,700 million B : Credit provided by other commercial banks agreements agreements 2) Maintaining structure, in Public Commitmentshareholding fees as specified the provided by by other commercial banks banks Baht term loan to commercial refinance another facility  provided Interest rate isother based on MLR and loan had 2)1) 2) Maintaining Maintaining shareholding shareholding structure, structure, Public Public company status etc. agreements  Interest Interest rate rate is is based based on on MLR MLR and and loan loan had had provided other commercial banks period 7 by year tenure However, this had been company status status etc. etc.UK, according 3) company Guaranteed by SSI loan Maintaining shareholding structure,toPublic period 7 rate year 7foryear tenure However, this had had been been 2) extended another 2However, years.  period Interest istenure based on MLRthis and loan had 3) 3) Guaranteed Guaranteed by by SSI SSI UK, UK, according according to loan to loan rescheduling agreement in third quarter company status etc. extended for another another 2 years. 2 years.  extended First repayment 3 months after first period 7for year tenure However, thisdraw-down had been rescheduling rescheduling agreement agreement in in third third quarter quarter guarantee wasUK, extended to cover the Guaranteed by SSI according to loan  First First repayment repayment 3 months 3 months after after firstfirst draw-down draw-down 3) 2013, extended for another 2 years. (16 March 2011). 2013, 2013, guarantee guarantee was was extended extended to cover to cover the the ultimate balance of sums payable by SSI. rescheduling agreement in third quarter (16 March March 2011). 2011).  (16 First repayment 3 months after first draw-down ultimate ultimate balance balance of sums of sums payable payable by by SSI. SSI. Facility C : Credit facility: Baht 12,000 million 2013, guarantee was extended to cover the (16CMarch 2011). Facility :CCredit : Credit facility: facility: Baht 12,000 12,000 million million ultimate balance of sums payable by SSI.  Facility Revolving facility to Baht refinance amounts owed Facility Revolving facility facility to to refinance refinance amounts amounts owed owed C : Credit facility: Baht 12,000 million toRevolving other commercial banks and for general to other other commercial commercial banks banks and forfor general general purposes (subject toand maximum short tocorporate Revolving facility to refinance amounts owed corporate purposes purposes (subject to maximum to maximum shortshortterm loans of Baht (subject 2,000 million) tocorporate other commercial banks and for general term loans loans of Baht of Baht 2,000 2,000 million) million) corporate purposes (subject to MLR maximum short term Interest charged at lower of or money  Interest Interest charged at at lower lower of of MLR MLR or or money money term loans of Baht 2,000 million) market ratecharged plus margin market market rate rate plus plus margin margin  Interest charged at lower of MLR or money market rate plus margin Group: Other interest-bearing liabilities Group: Group: Other Other interest-bearing interest-bearing liabilities liabilities In addition to the above borrowings, the Group has secured interest-bearing liabilities as follows: Group: Other interest-bearing liabilities In addition In addition to the to the above above borrowings, borrowings, thethe Group Group hashas secured secured interest-bearing interest-bearing liabilities liabilities as follows: as follows: Bank overdrafts short-term loansthe of Group the Company are secured by the pledge of raw materials and In addition to theand above borrowings, has secured interest-bearing liabilities as follows: Bank Bank overdrafts overdrafts andand short-term short-term loans loans of the ofand the Company Company are secured secured by by theboth the pledge pledge of raw of raw materials materials andand finished goods owned by the Company, for thoseare banks providing short-term and long-term finished finished goods goods owned owned by by the the Company, Company, and and for for those those banks banks providing providing both both short-term short-term and and long-term long-term loans,overdrafts the Company additionally and construction thereon machinery Bank andhas short-term loansmade of thea mortgage Company of areland secured by the pledge of rawand materials and loans, the Company Company hasassigned has additionally additionally made made a rights mortgage afor mortgage ofbanks land of land and and construction construction thereon and and machinery machinery ofloans, thethe Company and beneficiary under insurance policies thethereon lenders. These loan finished goods owned by the Company, and those providing bothtoshort-term and long-term ofloans, of thethe Company andand assigned assigned beneficiary beneficiary rights rights under under insurance insurance policies to the to thereon the lenders. lenders. These These loan loan agreements contain certain covenants as stipulated in the agreement that, among other things, require theCompany Company has additionally made a mortgage of land andpolicies construction and machinery agreements agreements contain contain certain certain covenants covenants as stipulated as stipulated in the in the agreement agreement that, that, among among other other things, things, require require maintenance of financial ratios.beneficiary rights under insurance policies to the lenders. These loan of the Company and assigned maintenance maintenance of financial of financial ratios. ratios. agreements contain certain covenants as stipulated in the agreement that, among other things, require Short-term loans of PPC,ratios. a subsidiary company, are secured by the mortgage of certain PPC owned maintenance of financial Short-term Short-term loans loans of of PPC, PPC, a subsidiary a future subsidiary company, company, are are secured secured by thethe mortgage mortgage of certain certain PPC PPC owned owned land and construction and/or construction thereon. Thebybank overdraft andof short-term loans of land land and and construction construction and/or and/or future future construction construction thereon. thereon. The The bank bank overdraft overdraft and and short-term short-term loans loans of of WCE, a subsidiary are secured by mortgage of certain WCE owned of land and construction Short-term loans of company, PPC, a subsidiary company, are secured by the mortgage certain PPC owned WCE, WCE, a subsidiary aconstruction subsidiary company, company, are secured secured by by mortgage mortgage of of certain certain WCE WCE owned land land andand construction construction thereon and the assignment beneficiary rights under insurance policies toowned theand lender. land and and/orofare future construction thereon. The bank overdraft short-term loans of thereon thereon and and the the assignment assignment of beneficiary of beneficiary rights rights under under insurance insurance policies policies to the to the lender. lender. WCE, a subsidiary company, are secured by mortgage of certain WCE owned land and construction thereon and the assignment of beneficiary rights under insurance policies to the lender. 70 70 70 70

229


(16 March 2011).

230

Facility C : Credit facility: Baht 12,000 million  Revolving facility to refinance amounts owed to other commercial banks and for general Notes to the Financial Statements corporate purposes (subject to maximum shortterm loans of Baht 2,000 million)  Interest charged at lower of MLR or money market rate plus margin

ultimate balance of sums payable by SSI.

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Group: Other interest-bearing liabilities In addition to the above borrowings, the Group has secured interest-bearing liabilities as follows: Bank overdrafts and short-term loans of the Company are secured by the pledge of raw materials and finished goods owned by the Company, and for those banks providing both short-term and long-term loans, the Company has additionally made a mortgage of land and construction thereon and machinery of the Company and assigned beneficiary rights under insurance policies to the lenders. These loan agreements contain certain covenants as stipulated in the agreement that, among other things, require maintenance of financial ratios.

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Short-term loans of PPC, a subsidiary company, are secured by the mortgage of certain PPC owned and its Joint Venture and/or future construction thereon. The bank overdraft and short-term loans of land and construction Notes WCE, to theafinancial subsidiarystatements company, are secured by mortgage of certain WCE owned land and construction thereon and the assignment of beneficiary rights under insurance policies to the lender.

Various long-term loans of the Company and its subsidiaries are secured by the mortgage/pledge of land with construction thereon and machinery, and the assignment of beneficiary rights under insurance policies to the lenders. For those 70 banks providing both short-term and long-term loan facilities, the Company has additionally made a second pledge of raw materials and finished goods of the Company. These loan agreements contain certain covenants as stipulated in the agreement that, among other things, required the Company to maintain financial ratios, the minimum maintenance of the Company’s shareholding in PPC and WCE, restrictions on dividend payment in each fiscal year, and a prohibition on the Company pledging their investments in shares of subsidiaries or creating any obligation thereon. During the third quarter of 2013, the long-term loan of PPC had been fully repaid. The Company does not contain certain covenants as stipulated in the agreement. As at 31 December 2015, the Group had unutilised credit facilities totalling Baht 35 million and the Company was cancelled all credit facilities (2014: Baht 813 million for the Group and Baht 8 million for the Company). On 21 September 2015, the major lenders demanded immediate payment of the remaining balance of a loan carried at USD 815 million (equivalent to Baht 30,034 million) of SSI UK. Consequently the major lenders also requested the Company to be responsible for this obligation as a guarantor. During September 2015, the Company was unable to maintain financial covenant ratios. Moreover, the Company was unable to repay principal and interest due in 30 September 2015 totalling Baht 3,068 million and Baht 825 million, respectively. Consequently, the Company’s long term debt of Baht 6,629 million has been reclassified as “long-term borrowings classified as current liabilities” in the consolidated financial statements and the separate financial statements, respectively. On 1 October 2015, the major lenders demanded immediate payment of the remaining balance of the Company’s loan carried at Baht 9,840 million as of 31 December 2015. Movement of long-term loans from financial institutions for the year ended 31 December 2015 and 2014 were as follows:

Note At 1 January Repayment Amortisation of transaction charges Effect of movements in exchange rates Transfer to liabilities held for disposal following liquidation of subsidiary

2(e)

Consolidated Separate financial statements financial statements 2015 2014 2015 2014 (in thousand Baht) 29,673,363 29,803,314 13,652,876 13,869,659 (235,523) (2,870) (229,523) (8,870) 50,878

32,785

12,740

12,740

1,661,491

72,787

-

-

-

-

(17,714,116)

-


obligation thereon. During the third quarter of 2013, the long-term loan of PPC had been fully repaid. a prohibition the Company pledging their investments in agreement. shares of subsidiaries or creating any The and Company does notoncontain certain covenants as stipulated in the obligation thereon. During the third quarter of 2013, the long-term loan of PPC had been fully repaid. notthe contain covenantscredit as stipulated the agreement. As atThe 31 Company Decemberdoes 2015, Groupcertain had unutilised facilitiesintotalling Baht 35 million and the

Annual Report Company was cancelled all credit facilities (2014: Baht 8132015million for the Group and Baht 8 million Notes to the Financial Statements As at 31 December 2015, the Group had unutilised credit facilities Baht 35 million and the 231 Sahaviriya Steel Industries Public Company totalling Limited for the Company). Company was cancelled all credit facilities (2014: Baht 813 million for the Group and Baht 8 million forSeptember the Company). On 21 2015, the major lenders demanded immediate payment of the remaining balance of a

loan carried at USD 815 million (equivalent to Baht 30,034 million) of SSI UK. Consequently the Onlenders 21 September 2015, the lenders demanded immediate payment ofasthe remaining balance of a major also requested the major Company to be responsible for this obligation a guarantor. loan carried at USD 815 million (equivalent to Baht 30,034 million) of SSI UK. Consequently the major lenders also requested the Company to be for this covenant obligationratios. as a guarantor. During September 2015, the Company was unable toresponsible maintain financial Moreover, the Company was unable to repay principal and interest due in 30 September 2015 totalling Baht 3,068 During 2015, the Company was unable to maintain financial covenant ratios. Moreover, million and September Baht 825 million, respectively. Consequently, the Company’s long term debt of Baht 6,629 the Company was unable to repay principal and interest due in 30 September 2015 totalling Baht 3,068 million has been reclassified as “long-term borrowings classified as current liabilities” in the million and Baht 825 million, respectively. Consequently, the Company’s long term debt of Baht 6,629 consolidated financial statements and the separate financial statements, respectively. On 1 October million has lenders been reclassified as “long-term borrowings classified balance as current liabilities” in the 2015, the major demanded immediate payment of the remaining of the Company’s consolidated financial statements and the separate financial statements, respectively. On 1 October loan carried at Baht 9,840 million as of 31 December 2015. 2015, the major lenders demanded immediate payment of the remaining balance of the Company’s loan carried at Baht 9,840 as of 31 institutions December 2015. Movement of long-term loans million from financial for the year ended 31 December 2015 and

2014 were as follows: Movement of long-term loans from financial institutions for the year ended 31 December 2015 and 2014 were as follows: Consolidated Separate Unit: Thousand Baht financial statements financial statements Consolidated Separate Consolidated financial statements Separate financial2014 statements Note 2015 2014 2015 financial statements financial statements (in thousand Baht) Note 2015 2014 2015 2014 Note 2015 2014 2015 2014 29,673,363 At 1 January 29,803,314 13,652,876 13,869,659 (in thousand Baht) Repayment (235,523) (2,870) (229,523) (8,870) 29,673,363 At 1 January 29,803,314 13,652,876 13,869,659 Amortisation of transaction Repayment (235,523) (2,870) (229,523) (8,870) charges 32,785 12,740 12,740 50,878 Amortisation of transaction Effect of movements in charges 32,785 50,878 exchange rates 72,787 - 12,740 - 12,740 1,661,491 Effect of movements in Transfer to liabilities held for exchange rates 72,787 1,661,491 disposal following Transfer to liabilities held for 2(e) liquidation of subsidiary (17,714,116) Limited,- its Subsidiaries Sahaviriya Steel Industries Public Company disposal following At 31 December 13,662,746 29,673,363 13,662,746 13,652,876 and its Joint Venture 2(e) liquidation of subsidiary (17,714,116) Notes toAtthe statements Public 31financial December 13,662,746 29,673,363 13,662,746 Sahaviriya Steel Industries Sahaviriya Company SteelLimited, Industries its Subsidiaries Public Company 13,652,876 Limited, its

Sahaviriya Industries Public Company Limited, its Subsidiaries and its JointSteel Venture and its Joint Venture and its Venture Notes to Joint the financial statements Notes to the financial statements

Subsid

Finance and hire purchase liabilities Notes to thelease financial statements

The Group had machinery, equipment and vehicles acquired under finance lease and hire purchase Finance lease hire purchase Finance lease and hire purchase liabilities agreements as at and 31 December were liabilities payable as follows: Finance lease and hire purchase liabilities

The Group had machinery, equipment The and vehicles Group had acquired machinery, underequipment finance lease and and vehicles hire purchase acquired under finance l Consolidated financial Thousand Baht The Group as hadat machinery, equipment and vehicles under statements finance lease and hireUnit: purchase agreements 31 December were payable agreements as follows: asacquired at 31 December were payable as follows: 2015 2014 Consolidated financial statements agreements as at 31 December were payable 71 as follows: Present Present value financial statements 2014Consolidated financial statem Future 2015 Consolidated value of Future of minimum 71 2015 Consolidated financial statements 2015 2014 minimum minimum minimum lease 2015 2014 Present Present Presentvalue lease lease lease payments Present Present value Future Future value of payments Future Future ofvalue minimum of payments Interest payments Interest Future value of minimum Future of minimum minimum minimum minimum minimum lease minimum (in thousand Baht) minimum minimum minimum lease lease lease lease lease lease payments lease Within one year 79,508 7,115 72,393 70,905 9,611 61,294 lease lease lease payments payments payments Interest payments payments payments Interest Interest payments After one year but payments Interest payments payments Interest (in thousand108,997 Baht) (in thousand Baht) within five years 79,498 6,490 73,008 7,432 101,565 thousand79,508 Baht) Within one year 79,508 Within 7,115 one year (in 72,393 70,905 7,115 9,611 61,294 72,393 70,905 Total 159,006 13,605 145,401 179,902 Withinone oneyear yearbut 79,508 70,905 17,043 9,611 162,859 61,294 After After7,115 one year but72,393 After onefive yearyears but within 79,498 within 6,490 five years73,008 79,498 108,997 6,490 7,432 101,565 73,008 108,997 Separate73,008 financial statements within five years 79,498 6,490 108,997 7,432 101,565 Total 159,006 Total 13,605 145,401 159,006 179,902 13,605 17,043 162,859 145,401 179,902 2015 2014 Total 159,006 13,605 145,401 179,902 17,043 162,859 Present Present value Separate financial statements Separate financial statemen Future value of Future of minimum 2015 Separate financial statements 2015 2014 minimum minimum minimum lease 2015 2014 Present Present Presentvalue lease lease lease payments Present Present value Future Future value of payments Future Future ofvalue minimum of payments Interest payments Interest Future value of minimum Future of minimum minimum minimum minimum minimum lease minimum (in thousand Baht) minimum minimum minimum lease lease lease lease lease payments lease lease Within one year 3,168 256 2,912 5,118 386 4,732 lease lease lease payments payments Interest payments payments payments Interest Interest payments payments After one year but payments Interest payments Interest (in843 thousandpayments Baht) (in thousand Baht) within five years 921 78 2,695 235 2,460 thousand 3,168 Baht) Within one year 3,168 Within256 one year (in2,912 5,118 256 386 4,732 2,912 5,118


Consolidated financial statements Consolidated financial statements 2015 Consolidated financial statements2015 2014 2 financial statements 2014 2015 Consolidated Present Present Present value 2015 2014 Present Present value Future value of Future Future ofvalue minimum of Future Present Present Future value ofAnnual Report Future ofminimum minimum minimum minimum minimum minimum leasevalue minimum 2015 Notes to the Financial Statements 232 Future value Future ofpayments minimum Industries Public Company Limited minimum minimum minimum lease leaseofSahaviriya Steel lease lease lease lease minimum minimum minimum lease lease lease lease payments Interest payments payments payments Interest payments payments Int lease lease lease payments payments Interest payments Interest (in thousandpayments Baht) (in thousand Baht) payments Interest payments Interest (in thousandpayments Baht) Within one year 79,508 Within 7,115 one year 72,393 79,508 70,905 9,611 7,115 61,294 72,393 70,905 9 (in thousand Baht) Within oneyear yearbut 79,508 70,905 9,611 61,294 After one After7,115 one year but72,393 Within one year 79,508 7,115 72,393 70,905 9,611 61,294 After one year but within five years 79,498 within 6,490five years 73,008 79,498 108,997 7,432 6,490 101,565 73,008 108,997 7 Unit: Thousand Baht 179,902 After one year but within five years 79,498 6,490 73,008 159,006 108,997 7,432 101,565 Total 159,006 Total 13,605 145,401 179,902 17,043 13,605 162,859 145,401 1 within five years 79,498 6,490 73,008 108,997 7,432 101,565 Total 159,006 13,605 145,401 179,902 17,043 162,859 Separate financial statements Total 159,006 13,605 145,401 179,902 17,043 162,859 2015 Separate financial statements 2014 Separate financial statements 2015 Separate financial statements 2015 2014 2 financial statements 2015 Separate 2014 Present Present Present value 2015 2014 Present Present value Future value of Future Future ofvalue minimum of Future Present Present Future value of minimum Future ofminimum minimum minimum minimum minimum leasevalue minimum Future value Future ofpayments minimum minimum minimum minimum lease leaseof lease lease lease lease minimum minimum minimum lease lease lease lease payments Interest payments payments payments Interest payments payments Int lease lease lease payments payments Interest payments Interest (in thousandpayments Baht) (in thousand Baht) payments Interest payments Interest (in2,912 thousandpayments Baht) Within one year 3,168 Within 256 one year 3,168 5,118 386 256 4,732 2,912 5,118 (in thousand Baht) Within oneyear yearbut 3,168 256 year but 2,912 5,118 386 4,732 After one After one Within one year 3,168 256 5,118 386 4,732 After one year but within five years 921 within 78five years2,912 843 921 2,695 235 78 2,460 843 2,695 After one year but within five years 921 78 843 2,695 235 2,460 Total 4,089 Total 334 3,755 4,089 7,813 621 334 7,192 3,755 7,813 within five years 921 78 843 2,695 235 2,460 Total 4,089 334 3,755 7,813 621 7,192 Total 4,089 334 3,755 7,813 621 7,192 The Group entered into a sale and lease back The Group agreement entered for machinery into a sale and equipment lease back agreement with a company for machinery and equipmen The Group entered and lease agreement for machinery anddeposit equipment withlessor a company in 2015. Lease terminto is aforsale a period of back 5inyears. 2015. The Lease Group term has is for paida the period of 5 to years. the The Group in thehas paid the deposit to The Group entered into a sale and lease back agreement for machinery and equipment with company in 2015. Lease term is for a period of 5 years. The Group has paid the deposit to the lessor in2015 the and equipment as at 31 amount of Baht 11.8 million. The net book amount value of Baht machinery 11.8 million. and equipment The net as book at 31 value December ofa machinery in 2015. Lease term is for a period of 5 years. The Group has paid the deposit to the lessor in the amount of Baht 11.8 million. The net book value of machinery and equipment as at 31 December 2015 is Baht 18.0 million. is Baht 18.0 million. amount of Baht 11.8 million. The net book value of machinery and equipment as at 31 December 2015 is Baht 18.0 million. Sahaviriya Steel Industries Public Company Limited, its Subsidiaries is Bahtdeposit 18.0 million. Time of Baht 12.8 million of a Time subsidiary deposit hasofbeen Bahtused 12.8asmillion a guarantee of a subsidiary for a credit hasfacility been used as a guarantee fo and its Joint Venture Sahaviriya Industries Company Limited, Subsidiaries Time deposit Baht 12.8 millionPublic of a extended subsidiary been used as aits guarantee credit facility extended bySteel a of financial institution. (2014: 21.3 million) byhas a financial institution. (2014: for 21.3a million) Notes toitsthe financial statements Time deposit of Baht 12.8 million(2014: of a subsidiary has been used as a guarantee for a credit facility by a Venture financial institution. 21.3 million) andextended Joint extended by a financial institution. (2014: 21.3 million)

Notes to the financial statements

The currency denomination of interest-bearing liabilities as at 31 December was as follows:

The currency denomination of interest-bearing liabilities as at 31 December was as follows: Consolidated SeparateUnit: Thousand Baht financial statements financial statements Consolidated Separate Consolidated financial 2014 statements Separate financial statements 2015 2015 2014 financial statements financial statements (in thousand Baht) 2015 2014 2015 2014 2015 2014 2015 2014 Thai Baht 26,604,427 26,029,463 26,200,172 25,608,539 (in thousand Baht) United 26,445,346 Thai States Baht Dollars 26,604,427 26,029,463 26,200,172 25,608,539 Total 26,604,427 52,474,809 26,200,172 25,608,539 United States Dollars 26,445,346 -

16

Total

16

26,604,427

Trade accounts payable

Trade accounts payable Note

Related parties Other parties Related parties Total Other parties

Note 4 4

52,474,809

26,200,172

25,608,539

72 72 Consolidated Separate 72 financial financialSeparate statements 72 statements Consolidated 2015 2014 2015 2014 financial statements financial statements (in thousand Baht) 2015 2014 2015 2014 88,441 810,981 127,127 2,086,405 (in thousand Baht) 2,715,812 9,991,777 2,668,273 6,148,671 88,441 810,981 127,127 2,086,405 2,804,253 10,802,758 2,795,400 8,235,076 2,715,812 9,991,777 2,668,273 6,148,671

Total 2,804,253 10,802,758 2,795,400 The currency denomination of trade accounts payable as at 31 December was as follows:

8,235,076

The currency denomination of trade accounts payable as at 31 December was as follows: Consolidated Separate financial statements financial statements Consolidated Separate 2015 2014 2015 2014 financial statements financial statements (in thousand Baht) 2015 2014 2015 2014 Thai Baht 212,088 412,100 213,878 519,054 (in thousand Baht) United 2,587,002 7,093,072 2,576,387 7,689,702 Thai States Baht Dollars 212,088 412,100 213,878 519,054 Pound Sterling 3,197,668 United States Dollars 2,587,002 7,093,072 2,576,387 7,689,702 Euro 4,844 99,627 4,844 26,054 Pound Sterling 3,197,668 Yen 319 291 291 266 Euro 4,844 99,627 4,844 26,054


The currency denomination of interest-bearing liabilities as at 31 December was as follows: The currency denomination of interest-bearing liabilities as at 31 December was as follows: Consolidated The Thecurrency currencydenomination denominationofofinterest-bearing interest-bearing liabilities liabilitiesasasatat31 31December Decemberwas wasasSeparate asfollows: follows: Consolidated Separate financial statements financial statements Annual Report 20152014 financial statements financial statements 2015 2015 2014 Consolidated Consolidated Separate Separate Notes to the Financial Statements 233 Sahaviriya Steel Industries Public Company Limited 2015 2014 2015 2014 (in thousand Baht)financial financial financialstatements statements financialstatements statements (in thousand 26,200,172 Baht) Thai Baht 26,604,427 26,029,463 25,608,539 2015 2015 2014 2014 2015 2015 2014 2014 Thai Baht 26,604,427 26,029,463 26,200,172 25,608,539 (in (in thousand thousand Baht) Baht) United States Dollars 26,445,346 Thai Thai Baht Baht 26,604,427 26,604,427 26,029,463 26,029,463 26,200,172 26,200,172 25,608,539 25,608,539 United States Dollars 26,445,346 Total 52,474,809 Total States 26,604,427 52,474,809 26,200,172 25,608,539 United United StatesDollars Dollars -26,445,346 26,445,346 --Total 26,604,427 26,604,427 52,474,809 52,474,809 26,200,172 26,200,172 25,608,539 25,608,539 16 Total Trade accounts payable

16 Trade accounts payable 16 16 Trade Tradeaccounts accountspayable payable

Unit: Thousand Baht Consolidated Separate Consolidated Separate financial statements financial statements Consolidated financial statements Separate financial statements financial statements financial statements Note 2015 2014 2015 2014 Consolidated Consolidated Separate Separate Note 2015 2014 2015 2014 Note 2015 2014 2015 2014 (in thousand Baht)financial financial financialstatements statements financialstatements statements (in thousand Baht) Related parties 4 88,441 810,981 127,127 2,086,405 Note Note 2015 2015 2014 2014 2015 2015 2014 2014 Related parties 4 88,441 810,981 127,127 2,086,405 Other parties 2,715,812 9,991,777 2,668,273 6,148,671 (in (inthousand thousandBaht) Baht) Other parties 2,715,812 9,991,777 2,668,273 6,148,671 Total 2,804,253 10,802,758 2,795,400 8,235,076 Related Related parties parties 44 88,441 88,441 810,981 810,981 127,127 127,127 2,086,405 2,086,405 Total 2,804,253 10,802,758 2,795,400 8,235,076 Other Otherparties parties 2,715,812 2,715,812 9,991,777 9,991,777 2,668,273 2,668,273 6,148,671 6,148,671 The currency denomination of trade accounts payable10,802,758 as at 31 December was as follows: 8,235,076 Total Total 2,804,253 2,804,253 10,802,758 2,795,400 2,795,400 8,235,076 The currency denomination of trade accounts payable as at 31 December was as follows: Consolidated Separate The Thecurrency currencydenomination denominationofoftrade tradeaccounts accounts payable payableasasatat31 31December Decemberwas wasasasfollows: follows: Consolidated Separate financial statements financial statements Unit: Thousand Baht financial statements financial statements 2015 2014 2015 2014 Consolidated Consolidated Separate Separate Consolidated financial statements Separate financial statements 2015 2014 2015 2014 (in thousand Baht) financial financialstatements statements financial financialstatements statements 2015 2015 2014 2015 2014 (in thousand Baht) Thai Baht 212,088 412,100 213,878 519,054 2015 2014 2014 2015 2015 2014 2014 Thai Baht 212,088 412,100 213,878 519,054 United States Dollars 2,587,002 7,093,072 2,576,387 7,689,702 (in (inthousand thousandBaht) Baht) United States Dollars 2,587,002 7,093,072 2,576,387 7,689,702 Pound Sterling 3,197,668 Thai ThaiBaht Baht 212,088 212,088 412,100 412,100 213,878 213,878 519,054 519,054 Pound Sterling 3,197,668 Euro 4,844 99,627 4,844 26,054 United UnitedStates StatesDollars Dollars 2,587,002 2,587,002 7,093,072 7,093,072 2,576,387 2,576,387 7,689,702 7,689,702 Euro 4,844 99,627 4,844 26,054 Yen 319 291 291 266 Pound PoundSterling Sterling -3,197,668 3,197,668 --Yen 319 291 291 266 Total 2,804,253 10,802,758 2,795,400 8,235,076 Euro Euro 4,844 4,844 99,627 99,627 4,844 4,844 26,054 26,054 Total 2,804,253 10,802,758 2,795,400 8,235,076 Yen Yen 319 319 291 291 291 291 266 266 Inventory under collateral management agreement 10,802,758 Total Total 2,804,253 2,804,253 10,802,758 2,795,400 2,795,400 8,235,076 8,235,076 Inventory under collateral management agreement The Company entered intomanagement the collateralagreement management agreements with two companies which are Inventory Inventory under under collateral collateral management agreement The Company entered into the collateral withthe twoCompany companies incorporated in Singapore and Japan. Under management the terms of agreements the agreements, has which to pay are a incorporated in Singapore and Japan. Under the terms of the agreements, the Company has to pay partial deposit and the remainder when withdrawing inventory from the representative company. The The entered into management agreements with two which are The Company Company entered into the the collateral collateral management agreements with two companies companies which area partial deposit and when withdrawing inventory from therelating representative The Company retains allthe or remainder a and significant portion of terms the risks andagreements, rewards to the company. collateralised incorporated ininSingapore Under the ofofthe the has aa incorporated Singapore andJapan. Japan. Under the terms the agreements, theCompany Company hastotopay pay Company retains a significant portion of facilities theinventory risks for andfrom rewards relating thecompany. collateralised inventory. Inventory isor stored in when the warehouse which that counterto party appoints a partial and the remainder withdrawing the representative The partialdeposit deposit andall the remainder when withdrawing inventory from the representative company. The inventory.retains Inventory is in manager. theportion warehouse facilities forare which counter party appoints representative to actall asor the These transactions treatedthat as inventory under collaterala Company significant ofof the risks rewards relating toto the collateralised Company retains all or astored acollateral significant portion the risks and and rewards relating the collateralised representative to act as the collateral manager. These transactions are treated as inventory under collateral management agreements and trade payable under collateral management agreements within the statement inventory. aa inventory. Inventory Inventory isis stored stored inin the the warehouse warehouse facilities facilities for for which which that that counter counter party party appoints appoints management agreements and trade payable under collateral management agreements within the statement of financial position. That seller provide a selling price which includes interest, management cost and representative representativetotoact actasasthe thecollateral collateralmanager. manager.These Thesetransactions transactionsare aretreated treatedasasinventory inventoryunder undercollateral collateral of financialbenchmark position. That aunder selling price which includes interest, management cost 3.8 and commodity price movements. Asunder at 31collateral December 2015, repurchase financing costs Baht management agreements and trade payable management agreements within the management agreements andseller tradeprovide payable collateral management agreements within thestatement statement commodity benchmark price movements. As at 31 December 2015, repurchase financing costs Baht 3.8 million (2014: Baht 22.8 million). ofoffinancial financialposition. position.That Thatseller sellerprovide provideaaselling sellingprice pricewhich whichincludes includesinterest, interest,management managementcost costand and million (2014: Baht 22.8 million). commodity commoditybenchmark benchmarkprice pricemovements. movements.As Asatat31 31December December2015, 2015,repurchase repurchasefinancing financingcosts costsBaht Baht3.8 3.8 million million(2014: (2014:Baht Baht22.8 22.8million). million).

73 73 73 73


234

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes to the Financial Statements

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its JointSteel Venture Sahaviriya Industries Public Company Limited, its Subsidiaries Notes to the financial statements and its JointSteel Venture Sahaviriya Industries Public Company Limited, its Subsidiaries Notes to the Steel financial statements Sahaviriya Industries Public Company Limited, its Subsidiaries and its Joint Venture and itstoJoint Venture Steel Industries Notes the financial statementsPublic Company Limited, its Subsidiaries 17Sahaviriya Other current liabilities Notes to the financial statements andOther its Joint Venture 17 current liabilities Notes to the financial statements

Consolidated Separate Unit: Thousand Baht financial statements financial statements Consolidated Separate Consolidated financial statements Separate financial statements 2015 2014 2015 2014 financial statements financial statements 2015 2014 2015 Separate 2014 Consolidated (in thousand Baht) Other current liabilities 2015 2014 2015Separate 2014 Consolidated financial statements financial statements Accrued expenses 306,456 2,120,770 295,541 65,185 (in thousand Baht) financial statements financial statements 2015 2014 2015 Other accounts payable 935,083 847,283 924,555 837,440 Consolidated Separate 2014 Accrued expenses 306,456 2,120,770 295,541 65,185 2015 2014 2015 2014 (in thousand Baht) Advances received from sales of financial financial statements Other accounts payable 935,083 statements 847,283 924,555 837,440 (in thousand Baht) Accrued 306,456 2,120,770 295,541 65,185 goods expenses 166,943 312,623 164,050 86,480 2015 2014 2015 2014 Advances received from sales of Accrued expenses 306,456 2,120,770 295,541 65,185 Other accounts payable 935,083 847,283 924,555 837,440 Accrued interest expenses 1,909,301 77,892 1,909,120 77,729 (in thousand Baht) goods 166,943 312,623 164,050 86,480 Other accounts payable 935,083 847,283 924,555 837,440 Advances received from sales of Others 248,267 1,676,424 210,393 26,824 Accrued expenses 306,456 2,120,770 295,541 65,185 interest expenses 1,909,301 77,892 1,909,120 77,729 Advances received from sales of goods 166,943 312,623 164,050 86,480 Total 3,566,050 5,034,992 3,503,659 1,093,658 Other accounts payable 935,083 847,283 924,555 837,440 Others 248,267 1,676,424 210,393 26,824 goods interest expenses 166,943 312,623 164,050 86,480 Accrued 1,909,301 77,892 1,909,120 77,729 Advances received from sales of Total 3,566,050 5,034,992 3,503,659 1,093,658 Accrued interest expenses 1,909,301 77,892 1,909,120 77,729 Others 248,267 1,676,424 210,393 26,824 The currency denomination of other current liabilities as at 31 December was as follows: goods 166,943 312,623 164,050 86,480 Others 248,267 1,676,424 210,393 26,824 Total 3,566,050 5,034,992 3,503,659 1,093,658 Accrued interest expenses of other current liabilities 1,909,301as at 31 December 77,892 1,909,120 77,729 The currency denomination as follows: 1,093,658 Total 3,566,050 5,034,992 was3,503,659 Consolidated Separate 26,824 Others 248,267 1,676,424 210,393 financial financial statements The currency denomination of other current liabilities asstatements at 31 December follows: Total 3,566,050 5,034,992 was as 3,503,659 1,093,658 Consolidated Separate The currency denomination of other current liabilities as at 31 December was as follows: Unit: Thousand 2015 2014 2015 2014 Baht financial statements financial statements Consolidated Separate (in thousand statements Separate financial statements 2015 2014 2015Separate 2014 The currency denomination of other currentConsolidated liabilities asfinancial at 31 December wasBaht) as follows: Consolidated financial statements financial statements Thai Baht 2,665,563 4,236,823 2,603,172 295,489 (in thousand Baht) financial 2015 statements 2014 2015 statements 2014 financial 2015 2014 2015 Separate 2014 United States Dollars 889,096 789,348 889,096 789,348 Consolidated Thai Baht 2,665,563 4,236,823 2,603,172 295,489 2015 2014 2015 2014 Pound 3,785 statements 3,785 statements financial financial UnitedSterling States Dollars 889,096 889,096 789,348 (in789,348 thousand Baht) Thai Baht 2,665,563 4,236,823 2,603,172 295,489 Euro 7,606 8,821 7,606 8,821 2015 2014 2015 2014Pound Sterling 3,785 3,785 Thai Baht 2,665,563 4,236,823 2,603,172 295,489 United States Dollars 889,096 789,348 889,096 789,348 Total 3,566,050 5,034,992 1,093,658 (in thousand 3,503,659 Baht) Euro 7,606 8,821 7,606 8,821 United States Dollars 889,096 789,348 889,096 789,348 Pound Sterling 3,785 3,785 Thai Baht 2,665,563 4,236,823 2,603,172 295,489 Total 3,566,050 5,034,992 3,503,659 1,093,658 Pound Sterling 3,785 -8,821 3,785 Euro 7,606 7,606 8,821 Employee benefit obligations United States Dollars 889,096 789,348 889,096 789,348 Euro 7,606 8,821 7,606 8,821 Total 3,566,050 5,034,992 3,503,659 1,093,658 Pound Sterling 3,785 3,785 Employee benefit obligations Total 3,566,050 5,034,992 3,503,659 1,093,658 Consolidated 8,821 Separate 8,821 Euro 7,606 7,606 financial statements financial statements Employee benefit obligations Total 3,566,050 5,034,992 3,503,659 1,093,658 Consolidated Separate Employee benefit obligations 2015 2014 2015 2014 financial statements financial statements Consolidated Separate (in thousand Baht) 2015 2014 2015Separate 2014 Employee benefit obligations Consolidated Unit: Thousand Baht financial statements financial statements Statement of financial position (in thousand Baht) financial statements financial statements 2015 2014 2015 2014 Statement of financial position Separate financial statements Consolidated Separate Statement of financial position Consolidated financial2014 statements 2015 2015 2014 (in thousand Baht) obligations for: financial statements financial statements Statement of financial position (in thousand Baht) 2015 2014 2015 2014 Statement of financial Statutory severance pay position 196,943 177,260 151,800 134,712 2015 2014 2015 2014 obligations for: Statement of financial position Statement of financial position Other long-term employee benefits 14,333 18,049 8,595 12,072 (in thousand Baht) Statutory severance payposition 196,943 177,260 151,800 134,712 Statement of financial obligations for: Total 211,276 195,309 160,395 146,784 Statement of financial position Other long-term benefits 14,333 18,049 8,595 12,072 obligations for:employee Statutory severance pay position 196,943 177,260 151,800 134,712 Statement of financial Total 211,276 195,309 160,395 146,784 Statutory severance pay 196,943 177,260 151,800 134,712 Other long-term employee benefits 14,333 18,049 8,595 12,072 Year ended 31 for: December obligations Other long-term employee benefits 14,333 18,049 8,595 12,072 Total 211,276 195,309 160,395 146,784 Statement of31 comprehensive income Statutory severance pay 196,943 177,260 151,800 134,712 Year ended December Total 211,276 195,309 160,395 146,784 Recognised in comprehensive profit or loss: Other long-term employee benefits 14,333 18,049 8,595 12,072 Statement of income Year ended 31 December Statutory severance payor loss: 23,460 21,712 17,088 15,904 Total 211,276 195,309 160,395 146,784 Recognised in profit Year ended 31 Statement of December comprehensive income Other long-term employee 2,671 2,741 1,726 1,771 Statutory severance pay benefits 23,460 21,712 17,088 15,904 Statement of comprehensive income Recognised in profit or loss: Total 26,131 24,453 18,814 17,675 Year ended 31 December Other long-term employee benefits 2,671 2,741 1,726 1,771 Recognised in profit pay or loss: Statutory severance 23,460 21,712 17,088 15,904 Statement of comprehensive income Total severance pay 26,131 24,453 18,814 17,675 Statutory 23,460 21,712 17,088 15,904 Other long-term employee benefits 2,671 2,741 1,726 1,771 Recognised inother profit or loss: Recognised in comprehensive Other long-term employee benefits 2,671 2,741 1,726 1,771 Total 26,131 24,453 18,814 17,675 Statutory 23,460 21,712 17,088 15,904 income:severance Recognised in otherpay comprehensive Total 26,131 24,453 18,814 17,675 Other long-term employee benefits 2,671 2,741 1,726 1,771 13,388 15,960 Defined benefit plan actuarial losses income: Recognised in other comprehensive Total 26,131 24,453 18,814 17,675 13,388 15,960 Defined benefit plan actuarial losses Recognised income: in other comprehensive income:benefit plan actuarial losses 13,388 15,960 Defined Recognised in other comprehensive 13,388 15,960 Defined benefit plan actuarial losses income: 13,388 15,960 Defined benefit plan actuarial losses

17 Other current liabilities 17 Other current liabilities 17

18 18 18 18 18

74

74

74 74


Total 18

3,566,050

5,034,992

3,503,659

1,093,658

Employee benefit obligations

Notes to the Financial Statements

Statement of financial position Statement of financial position obligations for: Statutory severance pay Other long-term employee benefits Total Year ended 31 December Statement of comprehensive income Recognised in profit or loss: Statutory severance pay Other long-term employee benefits Total

Annual Report 2015 Consolidated Sahaviriya Steel Industries Public Company Limited

Separate financial statements financial statements 2015 2014 2015 2014 (in thousand Baht)

196,943 financial statements 177,260 Consolidated 14,333 18,049 2015 2014 211,276 195,309

23,460 2,671 26,131

21,712 2,741 24,453

235

Unit: Thousand Baht 151,800 134,712 Separate financial statements 8,595 12,072 2015 2014 160,395 146,784

17,088 1,726 18,814

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Recognised in other comprehensive and its Joint Venture income: Notes to the financial statements Public Company Sahaviriya Steel Industries Limited,13,388 its Subsidiaries Defined benefit plan actuarial losses and its Joint Venture

15,904 1,771 17,675

15,960

Notes to the financial statements Statutory Severance Pay

The Group Severance and the Company operate defined benefit plans based on the requirement of Thai Labour Statutory Pay 74 Protection Act B.E. 2541 (1998) to provide retirement benefits to employees based on pensionable remuneration and length of service. The Group and the Company operate defined benefit plans based on the requirement of Thai Labour

Protection Act B.E. 2541 (1998) to provide retirement benefits to employees based on pensionable The movement and in the present value of the defined benefit obligations for the year ended 31 December remuneration length of service. 2015 and 2014 were shown in the table below: Consolidated Separate The movement in the present value of the defined benefit obligations for the year ended 31 December financial statements financial statements Unit: Thousand Baht 2015 and 2014 were shown in the table below: 2015Consolidated 2014 2015 Separate2014 Consolidated financial statements Separate financial statements (in thousand Baht) financial statements financial statements Defined benefit obligations at 1 January 161,648 146,784 115,725 195,308 2015 2014 2015 2014 2015 2014 2015 2014 (10,163) (4,180) (5,203) (2,576) Benefits paid by the plan (in thousand Baht) 26,131 24,453 18,814 17,675 Current and interest Definedservice benefitcosts obligations at 1 January 195,308 161,648 146,784 115,725 13,388 15,960 Defined benefit plan actuarial losses (10,163) (4,180) (5,203) (2,576) Benefits paid by the plan Defined benefit obligations at 31 December 211,276 195,309 160,395 146,784 26,131 24,453 18,814 17,675 Current service costs and interest 13,388 15,960 Defined benefit plan actuarial losses Expense recognised in profit or loss for the year ended 31 December were as follows: Defined benefit obligations at 31 December 211,276 195,309 160,395 146,784 Expense recognised in profit or loss for the year endedConsolidated 31 December were as follows: Separate financial statements financial statements 2015Consolidated 2014 2015 Separate 2014 (in thousand Baht) financial statements financial statements Current service costs 18,240 17,182 12,918 12,220 2015 2014 2015 2014 Interest on obligation 7,891 7,271 5,896 5,455 (in thousand Baht) Total 26,131 24,453 18,814 17,675 Current service costs 18,240 17,182 12,918 12,220

Interest on obligation 7,891 7,271 5,896 5,455 The expense is recognised in the following line items26,131 in the statement of comprehensive the Total 24,453 18,814income for 17,675 year ended 31 December as follows: Separate The expense is recognised in the following line itemsConsolidated in the statement of comprehensive income for the financial statements financial statements year ended 31 December as follows: 2015Consolidated 2014 2015 Separate2014 (in thousand Baht) financial statements financial statements Cost of sales 15,187 13,973 9,214 8,426 2015 2014 2015 2014 Selling expenses 805 740 547 504 (in thousand Baht) Administrative expenses 10,139 9,740 9,053 8,745 Cost of sales 15,187 13,973 9,214 8,426 Total 26,131 24,453 18,814 17,675 Selling expenses 805 740 547 504 Administrative expenses 10,139 9,740 9,053 Actuarial gains and losses recognised in other comprehensive income arising from: Total 26,131 24,453 18,814

8,745 17,675


2015 and 2014 shown in value the table below: movement in present the defined benefit obligations for year ended of 31Thai December Statutory Severance Pay The Group andwere thetheCompany operate defined benefit plans basedtoonemployees thethe requirement Labour Protection Act B.E. 2541 (1998) toof retirement benefits on The movement in theshown present value ofprovide the defined benefit obligations for the yearbased endedSeparate 31 pensionable December Consolidated 2015 and 2014 were in the table below: Protection Act B.E. 2541 (1998) to provide retirement benefits to employees based on pensionable remuneration and of service. The Group and thelength Company operate plans based on the requirement of Thai Labour 2015 and 2014 were shown in the tabledefined below: benefit financial statements financial statements The Group and thelength Company operate defined benefit plans based on the requirement of Thai Labour Consolidated Separate remuneration and of service. Protection Act B.E. 2541 (1998) to provide retirement benefits 2014 to employees 2015 based Separate on pensionable Consolidated 2015 2014 Protection Act B.E. 2541 (1998) to provide retirement benefits to employees based on pensionable financial statements financial statements The movementand in length the present value of the defined benefit obligations for the year financial ended 31 statements December remuneration of service. financial statements (in thousand 2015 obligations 2014 2015 2014 remuneration and of service. The movement in length theshown present value of the defined benefit for the yearBaht) ended 31 December Annual Report 2015 2015 and 2014 were in the table below: Notesbenefit to the Financial Statements 236 Defined 2015 Sahaviriya 2014 2015 2014 Steel Industries Public Company Limited at in 1 January 161,648 146,784 115,725 (in thousand Baht) 2015 and 2014obligations were shown the table below: 195,308 Consolidated The movement in the present value of the defined benefit obligations(inforthousand the yearBaht) endedSeparate 31 December Defined benefit at 1value January 195,308 161,648 115,725 The movement in the present of the defined (10,163) benefit obligations for the year146,784 endedSeparate 31 statements December (4,180) (5,203) (2,576) Benefits paid by obligations the plan Consolidated financial statements financial 2015 and 2014 obligations were shownatin1the table below: 195,308 Defined benefit January 161,648 146,784 115,725 2015 and 2014 were shown in the table below: 26,131 24,453 18,814 17,675 financial statements financial statements (10,163) (4,180) (5,203) (2,576) Current service and interest Benefits paid bycosts the plan 2015 2014 2015 Separate 2014 Consolidated (10,163) (4,180) (5,203) (2,576) Benefits paid by the plan Consolidated Separate 2015 2014 2015 2014 13,388 15,960 26,131 24,453 18,814 17,675 Defined benefit plan actuarial losses Current service costs and interest (in thousand Baht) financial statements financial statements 26,131 24,453 18,814 17,675 Current service costs and interest financial statements financial statements (in thousand Baht) 13,388 15,960 plan actuarial Defined atlosses December 211,276 195,309 160,395 146,784 Defined benefit benefit obligations obligations at 131 January 195,308 161,648 146,784 115,725 2015 2014 2015 2014 13,388 15,960 plan actuarial losses 2015 2014 2015 2014 Defined January 195,308 161,648 146,784 115,725 Defined benefit benefit obligations December 211,276 195,309 160,395 146,784 (10,163) (4,180) (5,203) (2,576) Benefits paid byobligations the plan atat1 31 (in thousand Baht) Defined benefit obligations at 31 December 211,276 195,309 160,395 146,784 Expense recognised in profit or loss for the year ended 31 December were as follows: (in thousand Baht) (10,163) (4,180) (5,203) (2,576) Benefits paid bycosts the plan 26,131 24,453 18,814 17,675 Current service and interest Defined benefit obligations at 1 January 195,308 161,648 146,784 115,725 Defined benefit obligations at or 1 January 195,308 161,648 146,784 115,725 Expenseservice recognised in profit loss for the year ended 31 December were as follows: 26,131 24,453 18,814 17,675 Current costs and interest 13,388 15,960 Defined actuarial losses (10,163) (4,180) (5,203) (2,576) Benefits paid byplan the plan Expensebenefit recognised in profit or loss for the year ended 31 December were as follows: Unit: Thousand Consolidated (10,163) (4,180) (5,203) (2,576) Benefits paid by the plan - Separate 13,388 15,960 Baht Defined benefit plan actuarial losses Definedservice benefitcosts obligations at 31 December 211,276 195,309 160,395 146,784 26,131 24,453 18,814 17,675 Current and interest financial statements financial statements Consolidated Separate 26,131 24,453 18,814 17,675 Current service and interest31 December Consolidated financial195,309 statements Separate financial146,784 statements Defined benefitcosts obligations 211,276 160,395 13,388 15,960 Defined benefit plan actuarialatlosses Consolidated Separate 2015 2014 2015 2014 financial statements financial statements - December 13,388 15,960 Defined plan actuarial losses Expensebenefit recognised in profitator loss for the year 31 were as follows: ended 2015 2014 2015 2014 Defined benefit obligations 31 December 211,276 195,309 160,395 146,784 financial statements financial statements (in thousand Baht) 201531 December 2014 2015 2014 Expensebenefit recognised in profitator31 loss for the year ended were as follows: Defined obligations December 211,276 195,309 160,395 146,784 2015 2014 2015 2014 Current service costs 18,240 17,182 12,918Separate 12,220 (in thousand Baht) Consolidated Expense recognised profit or loss for the year ended 31 December as follows: (inwere thousand Baht) Interest on obligation 7,891 7,271 5,896 5,455 Current service costs in 18,240 17,182 12,918 12,220 Expense recognised in profit or loss for the year ended 31 December were as follows: Consolidated Separate financial statements financial statements Current service costs 18,240 17,182 12,918 12,220 Interest on obligation 7,891 7,271 5,896 5,455 Total 26,131 24,453 18,814 17,675 financial statements financial statements 2015 2014 2015 Consolidated Separate2014 Interest 7,891 7,271 5,896 5,455 Consolidated Separate 2015 2014 2015 2014 Total on obligation 26,131 24,453 18,814 17,675 (in thousand Baht) financial statements financial statements Total 26,131 24,453 18,814income 17,675 financial statements financial (inofthousand Baht) The expense is recognised in the following line items in the statement comprehensive for the Current service costs 18,240 17,182 12,918 statements 12,220 2015 2014 2015 2014 2015 2014 2015 2014 Current service costs 18,240 17,182 12,918 12,220 year ended 31 December as follows: The expense is recognised in the following line items in the statement of comprehensive income for the Interest on obligation 7,891 7,271 5,896 5,455 (in thousand Baht) The expense isDecember recognisedasinfollows: the following line items7,891 in the statement of comprehensive income for the (in thousand Baht) Interest on obligation 7,271 5,896 5,455 Consolidated Separate year ended 31 Total 26,131 24,453 18,814 17,675 Current service costs 18,240 17,182 12,918 12,220 year ended 31 December as follows: Current service costs 18,240 17,182 12,918 12,220 financial statements financial statements Total 26,131 24,453 18,814 17,675 Consolidated Interest on obligation 7,891 7,271 5,896Separate 5,455 Consolidated Interest on obligation 7,891 7,271 5,896Separate 5,455 2015 2014 2015 2014 financial statements financial statements The expense is recognised in the following line items in the statement of comprehensive income for the Total 26,131 24,453 18,814 17,675 financial statements financial statements Total 26,131 24,453 18,814 17,675 (in thousand Baht) 2015 2014 2015 income 2014 The recognisedasinfollows: the following line items in the statement of comprehensive for the Baht Unit: Thousand year expense ended 31isDecember 2015 2014 2015 2014 Cost sales 31 December as follows: 15,187 13,973 9,214 8,426 (in thousand Baht) yearofended Consolidated Separate financial statements Separate financial The expense is recognised in the following lineConsolidated items in the statement of comprehensive incomestatements for the (in thousand Baht) Selling expenses 805 740 547Separate 504 The of expense in the statement of comprehensive income for the Cost sales is recognised in the following line items 15,187 13,973 9,214 8,426 Consolidated financial statements financial statements year ended 31 December as follows: Cost of sales 15,187 13,973 9,214 8,426 2015 2014 2015 2014 Administrative expenses 10,139 9,740 9,053 8,745 Selling expenses 805 statements 740 547 statements 504 year ended 31 December as follows: financial financial 2015 2014 2015 2014 Consolidated Selling expensesexpenses 805 740 547Separate 504 Administrative 10,139 9,740 9,053 8,745 Total 26,131 24,453 18,814 17,675 Consolidated Separate 2015 2014 2015 2014 (in thousand Baht) financial statements financial statements Administrative expenses 10,139 9,740 9,053 8,745 financial statements financial (in thousand Baht) Total 26,131 24,453 18,814 17,675 Cost of sales 15,187 13,973 9,214 statements 8,426 2015 2014 2015 2014 Total 26,131 24,453 18,814 17,675 2015 2014 2014 Cost of expenses sales 15,187 13,973 9,214 8,426 Actuarial gains and losses recognised in other comprehensive arising from:2015 Selling 805 income 740 547 504 (in thousand Baht) (in740 thousand Baht) Selling expenses 805 income 547 504 Actuarial gains and losses recognised in other comprehensive arising from: Administrative expenses 10,139 9,740 9,053 8,745 Cost of sales 15,187 income 13,973 8,426 Actuarial gainsexpenses and losses recognised in other comprehensive arising from:9,214 Cost of sales 15,187 13,973 9,214 8,426 Consolidated Separate Administrative 10,139 9,740 9,053 8,745 Total expenses 26,131 24,453 18,814 17,675 Selling 805 740 547 504 Selling expenses 805 statements 740 547Separate 504 financial financial statements Consolidated Total 26,131 24,453 18,814 17,675 Administrative expenses 10,139 9,740 9,053 8,745 Consolidated Separate Administrative expenses 10,139 9,740 9,053 8,745 2015 2014 2015 2014 financial statements financial statements Actuarial gains and losses recognised in other comprehensive income arising from: Total 26,131 statements 24,453 18,814 statements 17,675 financial financial (in arising thousand Baht) 2015 2014 2015 2014 Total 26,131 income 24,453 18,814 17,675 Actuarial gains and losses recognised in other comprehensive from: 2015 2014 2015 2014 Demographic assumptions - Consolidated (8,137) - Separate (7,593) (in thousand Baht) Actuarial gains and losses recognised in other comprehensive income arising from: (in thousand Baht) Financial --Consolidated (13,614) -- Separate (9,134) Demographic assumptions (8,137) (7,593) Actuarialassumptions gains and losses recognised in other comprehensive income arising from: financial statements financial statements Unit:31,907 Thousand Baht Demographic assumptions -(8,137) -(7,593) Experience adjustment 35,999 Financial assumptions (13,614) (9,134) financial statements financial statements 2015 2014 2015 2014 Consolidated Separate Consolidated financial(13,614) statements Separate statements Financial assumptions (9,134) Difference ---Consolidated (860) --- financial 780 Experience adjustment 35,999 31,907 Separate 2015 2014 2015 2014 (in thousand Baht) financial statements financial statements Experience adjustment 35,999 31,907 Difference (860) 780 Total 13,388 15,960 financial statements financial statements (in thousand Baht) 2015 2014 2015 2014 Demographic assumptions -(8,137) -(7,593) 2015 2014 2015 2014 Difference (860) 780 2015 2014 2015 2014 Demographic assumptions (8,137) (7,593) Total 13,388 15,960 Financial assumptions (13,614) (9,134) (in thousand Baht) Total 13,388 15,960 (in thousand Baht) Financial assumptions -- the defined (13,614) -- was 17 years (9,134) At 31 December 2015, the weighted-average duration of benefit obligation Experience adjustment 35,999 31,907 Demographic assumptions (8,137) (7,593) Demographic assumptions (8,137) (7,593) Experience adjustment 35,999 31,907 At 31 December benefit obligation Difference (860) 780 (2014: 17assumptions years). 2015, the weighted-average duration --of the defined Financial (13,614) -- was 17 years (9,134) Financial assumptions (13,614) (9,134) At 31 December 2015, the weighted-average duration of the defined benefit obligation was 17 years Difference (860) 780 Total 13,388 15,960 (2014: 17 years). Experience adjustment 35,999 31,907 75 Experience adjustment 35,999 31,907 Total 13,388 15,960 (2014: 17 years). Difference (860) 780 75 Difference (860) 780 Total -of the defined 13,388 - was 17 years 15,960 At 31 December 2015, the weighted-average duration benefit obligation 75 Total 13,388 15,960 At 31 December (2014: 17 years).2015, the weighted-average duration of the defined benefit obligation was 17 years (2014: 17 years).2015, the weighted-average duration of the defined benefit obligation was 17 years At 31 December 75 At 31 December 2015, the weighted-average duration of the defined benefit obligation was 17 years 75 (2014: 17 years). (2014: 17 years). 75 75


Notes to the Financial Statements

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its JointSteel Venture Sahaviriya Sahaviriya Sahaviriya Steel Steel Steel Industries Industries Industries Public Public Public Company Company Company Limited, Limited, Limited, its Subsidiaries its Subsidiaries Subsidiaries Sahaviriya Industries Public Company Limited, itsits Subsidiaries Sahaviriya Sahaviriya Sahaviriya Steel Steel Steel Industries Industries Industries Public Public Public Company Company Company Limited, Limited, Limited, its its Subsidiaries its Subsidiaries Subsidiaries Notes to the financial statements and and and its its Joint its Joint Joint Venture Venture Venture and its Joint Venture and and and its its its Joint Joint Joint Venture Venture Venture Notes Notes Notes to to the the to financial the financial financial statements statements statements Sahaviriya Sahaviriya Sahaviriya Steel Steel Industries Industries Industries Public Public Public Company Company Company Limited, Limited, Limited, itsits its Subsidiaries Subsidiaries Subsidiaries Notes to theSteel financial statements Notes the financial statements Notes Notes tototo the the financial financial statements statements and and and itsits its Joint Joint Joint Venture Venture Venture Actuarial assumptions

237

Notes Notes Notes to toto the the the financial financial financial statements statements statements The following were the principal actuarial assumptions at the reporting date (expressed as weighted Actuarial Actuarial Actuarial assumptions assumptions assumptions

Actuarial assumptions averages). Actuarial Actuarial Actuarial assumptions assumptions assumptions The TheThe following following following were were were the theprincipal the principal principal actuarial actuarial actuarial assumptions assumptions assumptions atatthe the at reporting the reporting reporting date datedate (expressed (expressed (expressed asasweighted weighted as weighted The following were the principal actuarial assumptions at the reporting date (expressed as weighted The The The following following following were were were the thethe principal principal principal actuarial actuarial actuarial assumptions assumptions assumptions atatthethe atreporting the reporting reporting date date (expressed date (expressed (expressed as weighted as as weighted weighted averages). averages). averages). Actuarial Actuarial Actuarial assumptions assumptions assumptions averages). Consolidated Separate Unit: % averages). averages). averages). The The The following following following were were were the the the principal principal principal actuarial actuarial actuarial assumptions assumptions assumptions at at the at the the reporting reporting reporting date date date (expressed (expressed (expressed asasas weighted weighted weighted financial statements financial statements Consolidated Consolidated Consolidated Separate Separate Separate Consolidated financial statements Separate financial statements Consolidated Separate2014 2015 2014 2015 averages). averages). averages). financial financial financial statements statements statementsSeparate financial financial financial statements statements statements Consolidated Consolidated Consolidated Separate Separate statements financial statements 2014 financial 2015 2014 2015 % 2015 2015 2015 2014 2014 2014 2015 2015 2015 2014 2014 2014 financial financial financial statements statements statements financial financial statements statements statements 2015 20144.3financial 2015 20144.3 Discount rate 4.3 4.3 Consolidated Consolidated Consolidated Separate Separate Separate % % % 2015 2015 2015 2014 2014 2014 % 2015 2015 2015 2014 2014 2014 Future salary growth 5.5 – 8.04.3 5.5 – % 8.0% 5.5 – 8.04.3 5.5 – 8.04.3 financial financial financial statements statements statements financial financial statements statements statements Discount Discount Discount rate rate rate 4.3 4.3 4.3 4.3%financial 4.3 4.3 4.3 4.3 4.3 Discount rate 4.3 4.3 4.3 4.3 2015 2015 2015 2014 2014 2014 2015 2015 2015 2014 2014 2014 Future Future Future salary salary salary growth growth growth 5.5 5.5 – 5.5 – 8.0 8.0 – 8.0 5.5 5.5 – 5.5 – 8.0 8.0 – 8.0 5.5 5.5 – 5.5 – 8.0 8.0 – 8.0 5.5 5.5 – 5.5 – 8.0 – 8.0 Discount Discount Discount rate rate rategrowth 4.3 4.3 4.34.3 4.3 4.34.3 4.3 4.3 4.38.0 Future salary 5.54.3 – 8.0 5.5 – 8.0 5.5 – and 8.0 5.5 4.3 – 8.0 % % % Assumptions regarding future mortality have been based on published statistics mortality tables. Future Future Future salary salary salary growth growth growth 5.5 5.5–5.5 –8.0 8.0 – 8.05.55.5 –5.5 8.0 – 8.0 – 8.05.55.5 – 8.0 5.5 – 8.0 – 8.0 5.5 5.5 – 8.0 5.5 – 8.0 – 8.0 Discount Discount Discount rate rate rate 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 Assumptions Assumptions Assumptions regarding regarding regarding future future future mortality mortality mortality have havehave been beenbeen based based based on onpublished published on published statistics statistics statistics and andmortality and mortality mortality tables. tables. tables. Assumptions regarding published tables. Future Future Future salary salary salary growth growth growth future mortality have been 5.5 5.5 5.5 –based –8.0 –8.0 8.0on5.5 5.5 5.5 – –8.0 –8.0 8.0statistics 5.5 5.5 5.5 – –8.0 –and 8.0 8.0mortality 5.5 5.5 5.5 – –8.0 –8.0 8.0 Assumptions regarding mortality have been based ononpublished statistics andand mortality tables. Assumptions Assumptions regarding regarding future future mortality mortality have have been been based based on published published statistics statistics and mortality mortality tables. tables. Sensitivity analysis

Sensitivity Sensitivity Sensitivity analysis analysis analysis Assumptions Assumptions Assumptions regarding regarding regarding future future future mortality mortality mortality have have have been been been based based based onon on published published published statistics statistics statistics and and and mortality mortality mortality tables. tables. tables. Sensitivity analysis Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding Sensitivity analysis Sensitivity Sensitivity analysis analysis other assumptions constant, would have affected the defined benefit obligations by the amounts shown Reasonably Reasonably Reasonably possible possible possible changes changes changes atatthe the atreporting the reporting reporting date datedate totoone one to of one ofthe the ofrelevant the relevant relevant actuarial actuarial actuarial assumptions, assumptions, assumptions, holding holding holding Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding Sensitivity Sensitivity Sensitivity analysis analysis analysis below. Reasonably possible changes at the reporting date totoone of thethe relevant actuarial assumptions, holding Reasonably Reasonably possible possible changes changes the atwould the reporting reporting date date one to one of ofdefined the relevant relevant actuarial actuarial assumptions, assumptions, holding holding other other other assumptions assumptions assumptions constant, constant, constant, would would have havehave affected affected affected the the defined the defined benefit benefit benefit obligations obligations obligations by bythe the byamounts the amounts amounts shown shown shown other assumptions constant, would have affected the defined benefit obligations by the amounts shown other assumptions constant, would have affected the benefit obligations by by theby amounts shown other other assumptions assumptions constant, constant, would would have have affected affected thedefined the defined defined benefit benefit obligations obligations the the amounts amounts shown shown below. below. below. Reasonably Reasonably Reasonably possible possible possible changes changes changes atatthe atthe the reporting reporting reporting date date date totoone toone one of ofthe ofthe the relevant relevant relevant actuarial actuarial actuarial assumptions, assumptions, assumptions, holding holding holding below. Consolidated Separate below. below. below. other other other assumptions assumptions assumptions constant, constant, constant, would would would have have have affected affected affected the the the defined defined defined benefit benefit benefit obligations obligations obligations byby by the the the amounts amounts amounts shown shown shown financial statements financial statements Consolidated Consolidated Consolidated Separate Separate Separate Consolidated Separate (in thousand Baht) below. below. below. Unit: Thousand Baht financial financial financial statements statements statements financial financial financial statements statements statements Consolidated Consolidated Consolidated Separate Separate Separate financial statements financial statements Increase Decrease Increase Decrease Defined benefit obligation 31 December 2015 financial (in (inthousand thousand (in thousand Baht) Baht) Baht) financial financial statements statements statements financial financial financial statements statements statements Consolidated financial statements Separate financial statements (in thousand Baht) Discount rate (1% movement) 371,596 (439,072) 278,868 (326,510) Consolidated Consolidated Consolidated Separate Separate Separate Increase Increase Increase Decrease Decrease Decrease Increase Increase Increase Decrease Decrease Decrease Defined Defined Defined benefit benefit benefit obligation obligation obligation 31 31December December 31 December 2015 2015 2015 (in (in thousand (in thousand thousand Baht) Baht) Baht) Increase Decrease Increase Decrease Defined benefit obligation 31 December 2015 Future salary growth (1% movement) 434,030 (357,772) 323,956 (269,312) financial financial financial statements statements statements financial financial financial statements statements statements Discount Discount Discount rate rate (1% rate (1% (1% movement) movement) movement) 371,596 371,596 371,596 (439,072) (439,072) (439,072) 278,868 278,868 278,868 (326,510) (326,510) (326,510) Increase Increase Increase Decrease Decrease Decrease Increase Increase Increase Decrease Decrease Decrease Defined Defined Defined benefit benefit benefit obligation obligation obligation 31 31 December December December 2015 2015 2015 Discount rate (1% movement) 371,596 (439,072) 278,868 (326,510) Gold (20% movement) 408,376 (397,772) 304,949 (297,351) (in (in (in thousand thousand thousand Baht) Baht) Baht) Future Future Future salary salary salary growth growth growth (1% (1%(1% movement) movement) movement) 434,030 434,030 434,030 (357,772) (357,772) (357,772) 323,956 323,956 323,956 (269,312) (269,312) (269,312) Discount Discount Discount rate rate rate (1% (1% (1% movement) movement) movement) 371,596 371,596 371,596 (439,072) (439,072) (439,072) 278,868 278,868 278,868 (326,510) (326,510) (326,510) Future salary growth (1% movement) 434,030 (357,772) 323,956 (269,312) Increase Increase Increase Decrease Decrease Decrease Increase Increase Increase Decrease Decrease Decrease Employee turnover rate (20% movement) 382,626 (425,589) 286,527 (317,201) Defined Defined Defined benefit benefit benefit obligation obligation obligation 31 31 31 December December December 2015 2015 2015 Gold Gold Gold (20% (20% (20% movement) movement) movement) 408,376 408,376 408,376 (397,772) (397,772) (397,772) 304,949 304,949 304,949 (297,351) (297,351) (297,351) Future Future Future salary salary salary growth growth growth (1% (1% (1% movement) movement) movement) 434,030 434,030 434,030 (357,772) (357,772) (357,772) 323,956 323,956 323,956 (269,312) (269,312) (269,312) Gold (20% movement) 408,376 (397,772) 304,949 (297,351) Discount Discount Discount rate rate rate (1% (1% (1% movement) movement) movement) 371,596 371,596 371,596 (439,072) (439,072) (439,072) 278,868 278,868 278,868 (326,510) (326,510) (326,510) Employee Employee Employee turnover turnover turnover rate rate(20% rate (20% (20% movement) movement) movement) 408,376 382,626 382,626 382,626 (425,589) (425,589) (425,589) 286,527 286,527 286,527 (317,201) (317,201) (317,201) Gold Gold Gold (20% (20% (20% movement) movement) movement) 408,376 408,376 (397,772) (397,772) (397,772) 304,949 304,949 304,949 (297,351) (297,351) (297,351) Employee turnover rate (20% movement) 382,626 (425,589) 286,527 (317,201) Future Future Future salary salary salary growth growth growth (1% (1% (1% movement) movement) movement) 434,030 434,030 434,030 (357,772) (357,772) (357,772) 323,956 323,956 323,956 (269,312) (269,312) (269,312) Although the analysis does not take account of382,626 the full distribution of cash flows expected under the Employee Employee Employee turnover turnover turnover rate rate rate (20% (20% (20% movement) movement) movement) 382,626 382,626 (425,589) (425,589) (425,589) 286,527 286,527 286,527 (317,201) (317,201) (317,201) Gold Gold Gold (20% (20% (20% movement) movement) movement) 408,376 408,376 408,376 (397,772) (397,772) (397,772) 304,949 304,949 304,949 (297,351) (297,351) (297,351) plan, itAlthough doesthe provide an approximation ofaccount the sensitivity of distribution the assumptions shown. Although Although theanalysis the analysis analysis does doesdoes not nottake not taketake account account ofofthe the of full the full full distribution distribution ofofcash cash of cash flows flows flows expected expected expected under under under the the the Although the analysis does not take account of the full distribution of cash flows expected under the Employee Employee Employee turnover turnover turnover rate rate rate (20% (20% (20% movement) movement) movement) 382,626 382,626 382,626 (425,589) (425,589) (425,589) 286,527 286,527 286,527 (317,201) (317,201) (317,201) Although Although Although the the the analysis analysis analysis does does does not not take take take account account account of of the of the full the full distribution full distribution distribution of of cash of cash flows cash flows flows expected expected expected under under the under the the plan, plan, plan, ititdoes does it does provide provide provide an anapproximation approximation an approximation ofofthe the ofsensitivity the sensitivity sensitivity ofofthe the ofassumptions the assumptions assumptions shown. shown. shown. plan, it does provide an approximation of the sensitivity of therights assumptions shown. 19 plan, Subordinated convertible debentures and convertible plan, plan, ititdoes itdoes does provide provide provide an an an approximation approximation approximation of ofthe the of sensitivity the sensitivity sensitivity ofofthethe ofassumptions the assumptions assumptions shown. shown. shown. Although Although Although the the the analysis analysis analysis does does does not not not take take take account account account ofofof the the the full full full distribution distribution distribution ofofof cash cash cash flows flows flows expected expected expected under under under the the the 19 19 Subordinated Subordinated Subordinated convertible convertible convertible debentures debentures debentures and and and convertible convertible convertible rights rights rights 1919 Subordinated convertible debentures and convertible rights plan, plan, plan, it itdoes itdoes does provide provide provide an anan approximation approximation approximation ofofthe of the the sensitivity sensitivity sensitivity ofthe ofrights the the assumptions assumptions assumptions shown. shown. shown. debentures and Movement during the year ended 31 December ofofthe subordinated convertible 1919 19 Subordinated Subordinated Subordinated convertible convertible convertible debentures debentures debentures and and and convertible convertible convertible rights rights convertible rights were as follows: Movement Movement Movement during during during the the year the yearyear ended ended ended 31 31 December 31 December December ofof the the of subordinated the subordinated subordinated convertible convertible convertible debentures debentures debentures and andand Movement during the yeardebentures ended 31 December of the rights subordinated convertible debentures and 1919 19 Movement Subordinated Subordinated Subordinated convertible convertible convertible debentures debentures and and and convertible convertible convertible rights rightsconvertible convertible convertible convertible rights rights rights were were were asasended follows: follows: as follows: Movement Movement during during during the the the year year ended ended 31 31 31 December December December of of the of the subordinated the subordinated subordinated convertible convertible debentures debentures debentures and and and convertible rights were as follows: Consolidated / Separated financial statements convertible convertible convertible rights rights rights were were were as follows: follows: as follows: Movement Movement Movement during during during the the the year year year ended ended ended 31 December December December ofConsolidated ofof the the the subordinated subordinated subordinated convertible convertible convertible debentures debentures debentures and and and At31 131 Amortisation Exercise of Repurchase At 31 Consolidated Consolidated / /Separated Separated / Separated financial financial financial statements statements statements Consolidated / Separated financial statements January charge for the convertible and December convertible convertible convertible rights rights rights were were were asasfollows: asfollows: follows: At At11At 1 Amortisation Amortisation Amortisation Exercise Exercise Exercise ofof of Repurchase Repurchase Repurchase At At31 31At 31 Consolidated Consolidated Consolidated / Separated / Separated / Exercise Separated financial financial statements statements statements At 1 Amortisation of financial Repurchase At 31 2015 yearcharge debentures cancellation 2015 January January January charge charge for forthe the for the convertible convertible convertible and and and December December At At 1 1 At 1 Amortisation Amortisation Amortisation Exercise Exercise Exercise of of of Repurchase Repurchase Repurchase At 31 At 31 At 31December January charge for the (inconvertible and December thousand Baht) Consolidated Consolidated Consolidated / Separated / Separated / Separated financial financial financial statements statements statements 2015 20152015 year yearthe year debentures debentures debentures cancellation cancellation cancellation 2015 20152015 January January January charge charge charge for for the for the convertible convertible convertible and and and December December December year debentures cancellation 2015 Subordinated convertible debentures At2015 At 1At1 1 Amortisation Amortisation Amortisation Exercise Exercise Exercise ofofthousand ofcancellation Repurchase Repurchase Repurchase At At 31 At 3131 (in (inthousand thousand (in Baht) Baht) Baht) 2015 2015 2015 year yearyear debentures debentures debentures cancellation cancellation 2015 2015 2015 (in thousand - Minority (No. 1/2012) 279 charge -for (4) Baht) and (275) January January January charge charge for for thethe the convertible convertible convertible and December December December Subordinated Subordinated Subordinated convertible convertible convertible debentures debentures debentures (in(in thousand thousand (in thousand Baht) Baht) Baht) and Subordinated convertible debentures 2015 279 (4) (275) - -- 2015 year year debentures debentures cancellation cancellation 2015 2015 - -Minority Minority - Minority (No. (No. 1/2012) (No. 1/2012) 1/2012) 279 279 279 year - - - debentures (4) (4) cancellation (4) (275) (275)(275)2015 Subordinated Subordinated convertible convertible convertible debentures debentures debentures 2015 -Subordinated Minority (No. 1/2012) 279 (4) (275) Less Convertible rights of thousand (inthousand thousand Baht) Baht) Baht) 279 279 279- - - - - - (in(in (4) (4) (4) (275) (275)(275) - Minority - Minority - Minority (No. (No. (No. 1/2012) 1/2012) 1/2012) 279 279279 (4)(4) (4) (275) (275) (275) - - - -- 279 (4) (275) -subordinated debentures (25) 25 Subordinated Subordinated Subordinated convertible convertible convertible debentures debentures debentures Less LessLess Convertible Convertible Convertible rights rights rights of of of 279 279279 -- (4)(4) (4) (275) (275) (275) - - Less Convertible rights of Less Deferred expenses for issued -Less Minority Minority Minority (No. (No. (No. 1/2012) 1/2012) 1/2012) 279 279 279 (4) (4) (4) (275) (275) (275) - -- subordinated subordinated subordinated debentures (25) (25) (25) -- -- 25 25 25 Less Less Convertible Convertible Convertible rights rights rights of ofdebentures of debentures subordinated debentures (25) - 4 -25 -of subordinated debentures (18) 14 279 279 279 (4) (4) (4) (275) (275) (275) Less Less Less Deferred Deferred Deferred expenses expenses expenses for forissued issued for issued(25) subordinated subordinated subordinated debentures debentures debentures (25)(25) -- - - 25 25 25 - - -Less Deferred expenses for issued Net 236 4 (4) (236) - -- Less Less Less Convertible Convertible Convertible rights rights rights of of of ofofexpenses subordinated subordinated of subordinated debentures debentures debentures (18) (18) (18) 44 4 -- 14 14 14 Less Less Less Deferred Deferred Deferred expenses expenses for for for issued issued issued of subordinated debentures (18) 4 14 subordinated subordinated subordinated debentures debentures debentures (25) (25) (25) 25 25 25 Net Net Net 236 236 236 4 4 4 44 4 - - - (4) (4) (4) 14 14 (236) (236)(236) ofofsubordinated of subordinated subordinated debentures debentures debentures (18) (18)(18) 14 - - -- - - Net 236 4 (4) (236) Convertible rights of for subordinated Less Less Less Deferred Deferred Deferred expenses expenses expenses for for issued issued issued Net Net Net 236 236236 44 4 (4)(4) (4) (236) (236) (236) - - debentures 25 -4 4 4 ofof subordinated ofsubordinated subordinated debentures (18) (18) (18) - -- 14(25) 1414 - -- Convertible Convertible Convertible rights rights rights ofdebentures ofdebentures subordinated subordinated of subordinated Convertible rights of subordinated Net Net Net debentures 236 236 236 4 4 4 (4) (4) (4) (236) (236) (236) debentures debentures 25 25 25 -- -- (25) (25) (25) - - - - - Convertible Convertible Convertible rights rights rights ofofsubordinated subordinated of subordinated debentures 25 (25) 76 debentures debentures debentures 25 25 25 -- - - (25)(25)(25) - - Convertible Convertible Convertible rights rights rights ofof subordinated ofsubordinated subordinated 76 76 76 debentures debentures debentures 252525 -76- - -(25) (25) (25) - --

7676 76


otherother assumptions assumptions constant, constant, would would have have affected affected the defined the defined benefit benefit obligations obligations by the byamounts the amounts shown shown (in thousand Baht) Consolidated Separate below. below. Increase financial Decrease Increasefinancial Decrease Defined benefit obligation 31 December 2015 statements statements Discount rate (1% movement) 371,596 (439,072) (in thousand 278,868 Baht)(326,510) Consolidated Separate Separate Future salary growth (1%obligation movement) 434,030Consolidated (357,772) 323,956Increase (269,312) Increase Decrease Decrease Defined benefit 31 December 2015 Annual Report 2015statements financial financial statements financial financial statements statements to the Financial 238 GoldNotes (20% movement) 408,376371,596 (397,772) 304,949 (297,351) Sahaviriya Steel Industries Public Company Limited 278,868 Discount rateStatements (1% movement) (439,072) (326,510) (in thousand (in thousand Baht)Baht)(317,201) Employee turnover rate (20%(1% movement) 382,626434,030 (425,589) 286,527 Future salary growth (357,772) 323,956 (269,312) Increase Decrease Decrease Increase Increase Decrease Decrease Defined Defined benefit benefit obligation obligation 31 movement) December 31 December 20152015Increase Gold (20% movement) 408,376 (397,772) 304,949 (297,351) Discount Discount rate (1% rate movement) (1% movement) 371,596 371,596 (439,072) (439,072) 278,868 278,868 (326,510) (326,510) Although the analysis doesrate not(20% take movement) account of the full distribution of cash flows expected under the Employee turnover 382,626 (425,589) 286,527 (317,201) Future Future salarysalary growth growth (1% movement) (1% movement) 434,030 434,030 (357,772) (357,772) 323,956 323,956 (269,312) (269,312) plan, it does provide an approximation of the sensitivity of the assumptions shown. GoldGold (20%(20% movement) movement) 408,376 408,376 (397,772) (397,772) 304,949 304,949 (297,351) (297,351) Although the rate analysis not take account of the382,626 full distribution of cash flows expected under the Employee Employee turnover turnover (20% rate does (20% movement) movement) 382,626 (425,589) (425,589) 286,527 286,527 (317,201) (317,201) 19 Subordinated convertible debentures and convertible rights plan, it does provide an approximation of the sensitivity of the assumptions shown. Although Although the analysis the analysis does does not take not take account account of theoffull the distribution full distribution of cash of cash flowsflows expected expected underunder the the Movement during the convertible year ended 31 Decemberand of the subordinated convertible debentures and 19 Subordinated debentures convertible rights plan,plan, it does it does provide provide an approximation an approximation of theofsensitivity the sensitivity of theofassumptions the assumptions shown. shown. convertible rights were as follows: Movement during the year ended 31and December of the subordinated convertible debentures and 19 19 Subordinated Subordinated convertible convertible debentures debentures and convertible convertible rights rights Consolidated / Separated financial statements convertible rights were as follows: Consolidated statements /Repurchase Separate financialAtstatements At 1 Amortisation financial Exercise of 31 Movement Movement during during the year the year ended ended 31 charge December 31 December of the of subordinated the subordinated convertible convertible debentures debentures and and January for the convertible and December Consolidated / Separated financial statements convertible convertible rightsrights werewere as follows: as follows: 2015 year debentures cancellation 2015 At 1 Amortisation Exercise of Repurchase At 31 (in thousand Baht) January charge for the convertible and December Consolidated Consolidated / Separated / Separated financial financial statements statements Subordinated convertible debentures 2015 year debentures cancellation 2015 At 1 At 1 Amortisation Amortisation Exercise Exercise of of Repurchase Repurchase - Minority (No. 1/2012) 279 (4) (275) -At 31 At 31 (in thousand Baht) January for thefor theconvertible convertible (275) and and December December 279 Januarycharge - charge (4) Subordinated convertible debentures 2015 2015 year year debentures debentures cancellation cancellation 2015 2015 Less Convertible rights of - Minority (No. 1/2012) 279 (4) (275) (in thousand Baht) Baht) subordinated debentures (25) - (in thousand 25 279 (4) (275) Subordinated convertible convertible debentures debentures LessSubordinated Deferred expenses for issued Less Convertible rights of - Minority Minority (No. 1/2012) (No.debentures 1/2012) (4) (4) of-subordinated (18)279 279 414(275) (275) - subordinated debentures (25) 25 279 279 (4) (4) (236) (275) (275) - Net 236 4 (4) Less Deferred expenses for issued Less Convertible Less Convertible rights rights of of of subordinated debentures (18) 4 14 subordinated subordinated debentures debentures (25) (25) 25 25 Convertible Net rights of subordinated 236 4 (4) (236) Less Deferred Less Deferred expenses expenses for issued for issued debentures 25 (25) of subordinated of subordinated debentures debentures (18) (18) 4 4 14 14 rights of subordinated 236 236 Net Convertible Net 4 4 (4) (4) (236) (236) debentures 25 76 (25) -

Sahaviriya Convertible Convertible rightsSteel rights of subordinated ofIndustries subordinated Public Company Limited, its Subsidiaries 25 25 - 76(25) (25) anddebentures itsdebentures Joint Venture Sahaviriya Sahaviriya Steel Steel Industries Industries Public Public Company Company Limited, Limited, its Subsidiaries its Subsidiaries Notes to the financial statements 76 76 andand its Joint its Joint Venture Venture Notes Notes to the to financial the financial statements statements

-

Consolidated financial statements / Separate financial statements

Consolidated / Separated financial statements At 1 Amortisation Exercise of Repurchase At 31 January charge for the convertible and December Consolidated Consolidated / Separated / Separated financial financial statements statements year debentures cancellation 2014 At 1 2014 At 1 Amortisation Amortisation Exercise Exercise of of Repurchase Repurchase At 31 At 31 (in thousand Baht) January Januarychargecharge for thefor theconvertible convertible and and December December Subordinated convertible debentures 2014 2014 year year debentures debentures cancellation cancellation 2014 2014 - Minority (No. 1/2012) 279 -Baht) Baht) 279 (in thousand (in thousand 279 279 Subordinated Subordinated convertible convertible debentures debentures Less Convertible rights of - Minority - Minority (No. 1/2012) (No. 1/2012) 279 279 279 279 subordinated debentures (25) (25) 279 279 279 279 Less Deferred expenses for issued Less Convertible Less Convertible rights rights of of of subordinated debentures --subordinated subordinated debentures debentures (25) (105) (25) - 87 (25) (18) (25) Net Deferred 149 87 236 Less Deferred Less expenses expenses for issued for issued of subordinated of subordinated debentures debentures (105) (105) Convertible rights of subordinated 149 149 Net Net debentures 25

87 87

-

87 87

-

-

-

-

(18) (18) 236 236 25

Convertible Convertible rightsrights of subordinated of subordinated Atdebentures the Extraordinary General debentures

Meeting held 25 25 of Shareholders - on - 22 September - 2011, the25shareholders 25 approved the Company to issue convertible debentures in an amount not exceeding Baht 2,250 million. For the Extraordinary detail as follows: At the AtExtraordinary the General General Meeting Meeting of Shareholders of Shareholders held held on 22onSeptember 22 September 2011,2011, the shareholders the shareholders approved approved the Company the Company to issue to issue convertible convertible debentures debentures in aninamount an amount not exceeding not exceeding Baht Baht 2,2502,250 million. million. The Company’s For the Fordetail the detail as follows: as existing follows:shareholders are to be offered - Up to Baht 1,650 million ofare convertible at the ratio of 1,000 existing shares to 1 The Company’s The Company’s existing existing shareholders shareholders toare beto offered be debentures offered convertible debenture, provided that any fraction of the convertible debentures is rounded up. - Up - to UpBaht to Baht 1,6501,650 million million of convertible of convertible debentures debentures at theat ratio the ratio of 1,000 of 1,000 existing existing shares shares to 1 to 1 These convertible debentures have: convertible convertible debenture, debenture, provided provided that any thatfraction any fraction of theofconvertible the convertible debentures debentures is rounded is rounded up. up. - Par value anddebentures offering price Baht 1,000 per unit, a 3 year term, coupon rate of 3% per annum These These convertible convertible debentures have:of have: (payable every 6 months) and can be exercised at the end of each quarter with the exercise period from


- Minority (No. 1/2012) Less Convertible rights of subordinated debentures Less Deferred expenses for issued Notes toofthe Financial Statements subordinated debentures Net

279 279

-

-

-

279 279

(25)

-

-

-

(25)

-

-

(18) 236

-

-

25

(105) 149

Convertible rights of subordinated debentures

25

Annual Report 2015 Sahaviriya 87 Steel Industries Public - Company Limited

87

-

At the Extraordinary General Meeting of Shareholders held on 22 September 2011, the shareholders approved the Company to issue convertible debentures in an amount not exceeding Baht 2,250 million. For the detail as follows: The Company’s existing shareholders are to be offered -

Up to Baht 1,650 million of convertible debentures at the ratio of 1,000 existing shares to 1 convertible debenture, provided that any fraction of the convertible debentures is rounded up. These convertible debentures have:

-

Par value and offering price of Baht 1,000 per unit, a 3 year term, coupon rate of 3% per annum (payable every 6 months) and can be exercised at the end of each quarter with the exercise period from 30 December 2011 to 3 years from issuance date (Board of Directors’ meeting held on 26 April 2012, the Board approved to postpone the exercise period from 30 December 2011 to be 30 June 2012).

-

The initial conversion price shall not be lower than the volume weighted average of the Company’s ordinary share trading price at offering period plus 10% premium and may be adjusted upwards or downwards at a certain rate or method as specified under the rights.

-

Repayment of subordinated convertible debentures by ordinary shares instead of cash. The convertible debenture holders shall convert all convertible debentures at a conversion price at the convertible debentures’ maturity date if the market share price is equal to a maximum of 110% of the conversion price.

-

Conversion price is Baht 1 per share.

If the Company’s existing shareholders do not subscribe for all available convertible debentures, the other investors may subscribe to convertible debentures with: -

Term (not exceeding 5 years), coupon rate (not more than 5% per annum), par value, offering and initial conversion price and exercise period to be determined by the Company’s Board of Directors.

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its On Joint 31 MayVenture 2015, a holder of Convertible Debentures No. 1/2015 declared their intention to exercise

conversion right to convert the Convertible Debentures in an aggregate principal amount of 4,000 Notestheir to the financial statements units or Baht 4,000 which was subsequently converted to the Company’s ordinary shares in June 2015. 77

The Company registered the increase of its paid-up capital with the Ministry of Commerce on 19 June 2015.

20

Share capital

Authorised At 1 January - ordinary shares - Reduction of shares - Increase of new shares At 31 December - ordinary shares Issued and paid-up At 1 January - ordinary shares Issue of new shares

Par value per share (in Baht)

Number

2015

2014 Baht Number (thousand shares / thousand Baht)

1 1 1

39,867,779 (5,604,116) 16,000,000

39,867,779 (5,604,116) 16,000,000

39,867,779 -

39,867,779 -

1

50,263,663

50,263,663

39,867,779

39,867,779

1 1

32,166,258 4

32,166,258 4

32,166,258 -

32,166,258 -

Baht

239


Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture Annual Report 2015 Notes the tofinancial statements and Joint Venture Notes the Financial Statements 240 its to Sahaviriya Steelits Industries Public Company Limited Sahaviriya Steel Industries Public Company Limited, Subsidiaries Notes to the financial statements and its Joint Venture

Notes toThe theCompany financial statements registered the increase of its paid-up capital with the Ministry of Commerce on 19 June

2015. The Company registered the increase of its paid-up capital with the Ministry of Commerce on 19 June 2015. Company registered the increase of its paid-up capital with the Ministry of Commerce on 19 June 20 The Share capital 2015. 20 Share capital Par value 2015 2014 2015 2014 per share Number Baht Number Baht 20 Share capital Par value 2015 2014 Baht) Number (thousand per(inshare Baht shares / thousand Number Baht) Baht Authorised Par value 2015 2014 (in Baht) (thousand shares / thousand Baht) At 1 January per share Number Baht Number Baht Authorised 1 39,867,779(thousand 39,867,779 39,867,779 39,867,779 (in Baht) shares / thousand Baht) At -1ordinary January shares - Reduction of shares (5,604,116) 39,867,779 (5,604,116) 39,867,779 - ordinary shares 11 39,867,779 39,867,779 Authorised Increase of new shares 1 16,000,000 16,000,000 At 1 January of shares - Reduction 1 (5,604,116) (5,604,116) - 31 December ordinary shares 39,867,779 39,867,779 39,867,779 39,867,779 -At Increase of new shares 1 16,000,000 16,000,000 -31 ordinary 50,263,663 50,263,663 39,867,779 39,867,779 - Reduction ofshares shares 11 (5,604,116) (5,604,116) At December -- Increase new shares 1 16,000,000 16,000,000 ordinaryofshares 50,263,663 50,263,663 39,867,779 39,867,779 1 AtIssued 31 December and paid-up -At ordinary shares 1 50,263,663 50,263,663 39,867,779 39,867,779 1 January Issued and paid-up 1 32,166,258 32,166,258 32,166,258 32,166,258 At -1ordinary January shares Issueand of new shares - ordinary shares 11 32,166,258 4 32,166,258 4 32,166,258 32,166,258 Issued paid-up At 31ofDecember AtIssue 1 January new shares 1 4 4 -31ordinary shares 32,166,262 32,166,262 32,166,258 32,166,258 32,166,258 32,166,258 - ordinary shares 11 32,166,258 32,166,258 At December of newshares shares 1 4 4 -Issue ordinary 1 32,166,262 32,166,262 32,166,258 32,166,258 discount AtShare 31 December 1discount January - At ordinary shares 1 32,166,262 32,166,262 32,166,258 32,166,258 Share ordinary shares 32,166,258 5,678,076 32,166,258 5,678,076 At 1 January Issue of new shares 4 Share discount - ordinary shares 32,166,258 5,678,076 32,166,258 5,678,076 At 31 At 1 January Issue ofDecember new shares 4 -31 ordinary shares 32,166,262 5,678,076 32,166,258 32,166,258 5,678,076 - ordinary shares 32,166,258 5,678,076 5,678,076 At December Issue of newshares shares 4 - ordinary 32,166,262 5,678,076 32,166,258 5,678,076 AtIncrease 31 December of new shares - ordinary 32,166,262 5,678,076 32,166,258 5,678,076 Increase ofshares new shares At the Extraordinary General Meeting of Shareholders held on 20 April 2015, the shareholders passed Atthe thefollowing Extraordinary General Meeting of Shareholders held on 20 April 2015, the shareholders passed Increase of newresolutions: shares the following resolutions: March 2015, theGeneral Company registered it decrease held in registered share capital with the Ministry AtInthe Extraordinary Meeting of Shareholders on 20 April 2015, the shareholders passedof The capitalindecreased cancelling unissued theCommerce. following resolutions: In March 2015, theCompany’s Company registered registered share it decrease registeredbyshare capital5,604,115,435 with the Ministry of registered The shares with a parregistered value of Baht per share. The capital reduction decreased the Company’s Commerce. Company’s share1 capital decreased by cancelling 5,604,115,435 unissued registered sharethe capital from Baht Baht 34,263.66 In March 2015, Company registered registered share million. capital with the of registered shares with a par value of39,867.78 Baht it1 decrease permillion share.into The capital reduction decreased the Ministry Company’s Commerce. The capital Company’s sharemillion capital to decreased by cancelling registered share from registered Baht 39,867.78 Baht 34,263.66 million.5,604,115,435 unissued In June 2015, hasofregistered increase paid-up share capital withthe theCompany’s Ministry of registered shares the withCompany a par value Baht 1 peritsshare. Theincapital reduction decreased Commerce. The Company’s registered share capital increased by Baht 16,000 million from Baht registered sharethe capital from Baht 39,867.78its million to Baht 34,263.66 million. In June 2015, Company has registered increase in paid-up share capital with the Ministry of 34,263.66 The million to Baht 50,263.66 the creation of an 16,000,000,000 Commerce. Company’s registeredmillion share by capital increased by additional Baht 16,000 million fromordinary Baht shares with atheparCompany ofhas Baht 1 million per share to be offered shareholders private In June 2015, registered itsbyincrease in paid-up share capital with thethrough Ministry of 34,263.66 million to value Baht 50,263.66 the creation oftoanexisting additional 16,000,000,000 ordinary placement. Commerce. registered share to capital increased by Bahtshareholders 16,000 million fromprivate Baht shares with The a parCompany’s value of Baht 1 per share be offered to existing through 34,263.66 placement.million to Baht 50,263.66 million by the creation of an additional 16,000,000,000 ordinary shares with a par value of Baht 1 per share to be offered to existing shareholders through private placement.

78 78 78 78


At 31 December - ordinary shares Share discount Notes to the Financial Statements At 1 January - ordinary shares Issue of new shares At 31 December - ordinary shares

1

32,166,262

32,166,262

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

32,166,258

32,166,258 241

32,166,258 4

5,678,076 -

32,166,258 -

5,678,076 -

32,166,262

5,678,076

32,166,258

5,678,076

Increase of new shares At the Extraordinary General Meeting of Shareholders held on 20 April 2015, the shareholders passed the following resolutions: In March 2015, the Company registered it decrease in registered share capital with the Ministry of Commerce. The Company’s registered share capital decreased by cancelling 5,604,115,435 unissued registered shares with a par value of Baht 1 per share. The capital reduction decreased the Company’s registered share capital from Baht 39,867.78 million to Baht 34,263.66 million. In June 2015, the Company has registered its increase in paid-up share capital with the Ministry of Commerce. TheIndustries Company’s Public registeredCompany share capital increaseditsbySubsidiaries Baht 16,000 million from Baht Sahaviriya Steel Limited, 34,263.66 million to Baht 50,263.66 million by the creation of an additional 16,000,000,000 ordinary and its Joint Venture shares with a par value of Baht 1 per share to be offered to existing shareholders through private Notes to the financial statements placement.

21

Reserves Legal reserve Section 116 of the Public Companies Act B.E. 2535 Section 116 requires that a public company shall allocate not less than 5% of its annual net profit, less any accumulated losses brought forward, to a reserve account (“Legal reserve”), until this account reaches an amount not less than 10% of the registered authorised capital. The legal reserve is 78 not available for dividend distribution. Other components of equity Currency translation differences The currency translation differences account within equity comprises all foreign currency differences arising from the translation of the financial statements of foreign operations, as well as from the translation of liabilities that hedge the Company’s net investment in a foreign operation. Valuation surplus The valuation surplus account within equity comprises the cumulative net change in the valuation of property, plant and equipment included in the financial statements at valuation until such property, plant and equipment is sold or otherwise disposed of. Movements in reserves Movements in reserves are shown in the statements of changes in equity.

22

Segment reporting Prior to 2 October 2015, the Group has four reportable segments, as described below, which are the Group’s strategic divisions. The strategic divisions offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the strategic divisions, the chief operating decision maker (CODM) reviews internal management reports on at least a quarterly basis. The following summary describes the operations in each of the Group’s reportable segments. Segment 1 Segment 2 Segment 3 Segment 4

Manufacture of hot rolled coils Maintenance services Deep-sea port services Coke manufacturing and steel making plants

As discussed in Note 2 to the financial statements following the liquidation of SSI UK, coke


Valuation surplus 242

The valuation surplus account within equity comprises the cumulative net change in the valuation of Annual Report 2015 property, and Statements equipment included in the financial statements at valuation until such property, Notes toplant the Financial Sahaviriya Steel Industries Public Company Limited plant and equipment is sold or otherwise disposed of. Movements in reserves Movements in reserves are shown in the statements of changes in equity.

22

Segment reporting Prior to 2 October 2015, the Group has four reportable segments, as described below, which are the Group’s strategic divisions. The strategic divisions offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the strategic divisions, the chief operating decision maker (CODM) reviews internal management reports on at least a quarterly basis. The following summary describes the operations in each of the Group’s reportable segments. Segment 1 Segment 2 Segment 3 Segment 4

Manufacture of hot rolled coils Maintenance services Deep-sea port services Coke manufacturing and steel making plants

As discussed in Note 2 to the financial statements following the liquidation of SSI UK, coke

Sahaviriya SteelandIndustries Limited, Subsidiaries manufacturing steel makingPublic plants hasCompany been discontinued from 2its October 2015. Information about coke manufacturing and steel making plants business segment previously reported but are now and its Joint Venture on discontinued operations are as follows: Notespresented to the financial statements

External revenue Inter-segment revenue Segment profit (loss) before income tax Reportable segment Assets as at 31 December 2015 Reportable segment Liabilities as at 31 December 2015

79

Unit: Thousand Baht Coke andsteel steelmaking makingplants Cokemanufacturing manufacturing and plants the For period the period from For year the year ended For For the ended 1 Januaryfrom to 31 December 2014 to 2015 2 31 December 2014 1 January 2 October October 2015 (in thousand Baht) 11,714,193 32,200,494 5,790,190 14,608,493 38,036,617 (4,395,839) -

42,025,093

-

4,486,305

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before tax, as included in the internal management reports that are reviewed by the Group’s CODM. Segment profit before tax is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.


Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Sahaviriya Sahaviriya SahaviriyaSteel Steel SteelIndustries Industries IndustriesPublic Public PublicCompany Company CompanyLimited, Limited, Limited,its its itsSubsidiaries Subsidiaries Subsidiaries and its Joint Venture Notes to the Financial Statements Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and and andits its itsJoint Joint JointVenture Venture Venture NotesitstoJoint the financial statements and Venture Notes Notes Notestoto tothe the thefinancial financial financial statements statements statements

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

243

Notes to the financial statements

Information about reportable segments Information Information Information about about aboutreportable reportable reportablesegments segments segments Information about reportable segments

Manufacture Manufacture Manufacture Manufacture Manufacture Manufacture of hot rolled coils Manufacture of ofof of of hot hot hot hot hot rolled rolled rolled rolled rolled coils coils coils coils coils 2015 2014 of hot rolled coils 2015 2015 2015 2015 2015 2014 2014 2014 2014 2014 (Restated) 2015 2014 2015 2014 (Restated) (Restated) (Restated) (Restated) (Restated) (Restated) (Restated) 19,611,578 32,381,575 External revenue 19,611,578 19,611,578 19,611,578 19,611,578 19,611,578 32,381,575 32,381,575 32,381,575 32,381,575 32,381,575 External External External External External revenue revenue revenue revenue revenue 19,611,578 32,381,575 External revenue Inter-segment revenue -- ---- --Inter-segment Inter-segment Inter-segment Inter-segment Inter-segment revenue revenue revenue revenue revenue Inter-segment revenue (2,872,631) (443,928) Segment profit (loss) before income tax (2,872,631) (2,872,631) (2,872,631) (2,872,631) (2,872,631) (443,928) (443,928) (443,928) (443,928) (443,928) Segment Segment Segment Segment Segment profit profit profit profit profit (loss) (loss) (loss) (loss) (loss) before before before before before income income income income income tax tax tax tax tax (2,872,631) (443,928) Segment profit (loss) before income tax 26,880,704 66,304,357 Reportable segment assets as at 31 December 26,880,704 26,880,704 26,880,704 26,880,704 26,880,704 66,304,357 66,304,357 66,304,357 66,304,357 66,304,357 Reportable Reportable Reportable Reportable Reportable segment segment segment segment segment assets assets assets assets assets as asas as as at atat at 31 at 3131 31 31 December December December December December Reportable segment liabilities as at 26,880,704 66,304,357 Reportable segment assets as at 31 December Reportable Reportable Reportable Reportable Reportable segment segment segment segment segment liabilities liabilities liabilities liabilities liabilities as asas as as at atat at at 64,321,980 36,344,910 31 December Reportable segment liabilities as at 64,321,980 64,321,980 64,321,980 64,321,980 64,321,980 36,344,910 36,344,910 36,344,910 36,344,910 36,344,910 31 3131 31 31 December December December December December 64,321,980 36,344,910 31 December

Maintenance services Maintenance Maintenance Maintenance Maintenance Maintenance services services services services services 2015 2014 Maintenance services 2015 2015 2015 2015 2015 2014 2014 2014 2014 2014 (Restated) 2015 2014 2015 2014 (Restated) (Restated) (Restated) (Restated) (Restated) (Restated) (Restated) 416,453 567,250 416,453 416,453 416,453 416,453 416,453 567,250 567,250 567,250 567,250 567,250 416,453 567,250 185,013 235,682 185,013 185,013 185,013 185,013 185,013 235,682 235,682 235,682 235,682 235,682 185,013 235,682 (34,216) (143,621) (34,216) (34,216) (34,216) (34,216) (34,216) (143,621) (143,621) (143,621) (143,621) (143,621) (34,216) (143,621) 354,778 477,137 354,778 354,778 354,778 354,778 354,778 477,137 477,137 477,137 477,137 477,137 354,778 477,137 338,782 436,242 338,782 338,782 338,782 338,782 338,782 436,242 436,242 436,242 436,242 436,242 338,782 436,242

81 81 81 81 81 81 81

Deep-sea port services Deep-sea Deep-sea Deep-sea Deep-sea Deep-sea port port port port port services services services services services 2015 2014 Deep-sea 2015 2015 2015 2015 2015 port services 2014 2014 2014 2014 2014 (Restated) 2015 2015 2014 2014 (Restated) (Restated) (Restated) (Restated) (Restated) (in thousand Baht) (Restated) (in (in (in (in (in thousand thousand thousand thousand thousand Baht) Baht) Baht) Baht) Baht) (Restated) 144,974 (in thousand Baht)143,572 144,974 144,974 144,974 144,974 144,974 143,572 143,572 143,572 143,572 143,572 144,974 143,572 99,037 139,597 99,037 99,037 99,037 99,037 99,037 139,597 139,597 139,597 139,597 139,597 99,037 139,597 (123,764) 72,536 (123,764) (123,764) (123,764) (123,764) (123,764) 72,536 72,536 72,536 72,536 72,536 (123,764) 72,536 1,813,756 2,068,139 1,813,756 1,813,756 1,813,756 1,813,756 1,813,756 2,068,139 2,068,139 2,068,139 2,068,139 2,068,139 1,813,756 2,068,139 313,954 366,954 313,954 313,954 313,954 313,954 313,954 366,954 366,954 366,954 366,954 366,954 313,954 366,954

Elimination of Elimination Elimination Elimination Elimination Elimination of ofof of of inter-segment revenues Elimination of inter-segment inter-segment inter-segment inter-segment inter-segment revenues revenues revenues revenues revenues 2015 2014 inter-segment revenues 2015 2015 2015 2015 2015 2014 2014 2014 2014 2014 (Restated) 2015 2015 2014 2014 (Restated) (Restated) (Restated) (Restated) (Restated) (Restated) (Restated) -- ---- --(284,050) (375,279) (284,050) (284,050) (284,050) (284,050) (284,050) (375,279) (375,279) (375,279) (375,279) (375,279) (284,050) (375,279) 162,307 18,574 162,307 162,307 162,307 162,307 162,307 18,574 18,574 18,574 18,574 18,574 162,307 18,574 (384,471) 8,402,232 (384,471) (384,471) (384,471) (384,471) (384,471) 8,402,232 8,402,232 8,402,232 8,402,232 8,402,232 (384,471) 8,402,232 (70,946) 34,685,245 (70,946) (70,946) (70,946) (70,946) (70,946) 34,685,245 34,685,245 34,685,245 34,685,245 34,685,245 (70,946) 34,685,245

Unit: Thousand Baht Total Total Total Total Total Total 2015 2014 2015 2015 2015 2015 2015 Total 2014 2014 2014 2014 2014 (Restated) 2015 2015 2014 2014 (Restated) (Restated) (Restated) (Restated) (Restated) (Restated) (Restated) 20,173,005 33,092,397 20,173,005 20,173,005 20,173,005 20,173,005 20,173,005 33,092,397 33,092,397 33,092,397 33,092,397 33,092,397 20,173,005 33,092,397 -- ---- --(2,868,304) (496,439) (2,868,304) (2,868,304) (2,868,304) (2,868,304) (2,868,304) (496,439) (496,439) (496,439) (496,439) (496,439) (2,868,304) (496,439) 28,664,767 77,251,865 28,664,767 28,664,767 28,664,767 28,664,767 28,664,767 77,251,865 77,251,865 77,251,865 77,251,865 77,251,865 28,664,767 77,251,865 64,903,770 71,833,351 64,903,770 64,903,770 64,903,770 64,903,770 64,903,770 71,833,351 71,833,351 71,833,351 71,833,351 71,833,351 64,903,770 71,833,351


244

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes to the Financial Statements

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its JointSteel Venture Sahaviriya Industries Public Company Limited, its Subsidiaries Notes to the financial statements

and its Joint Venture

Notes to the financial statements

Reconciliation of reportable segment profit or loss and assets

Reconciliation of reportable segment profit or loss and assets For the year ended 31 December

For the year ended 31 December

For theoryear Profit lossended 31 December Total loss for reportable segments Profit or loss Elimination of inter-segment profits Total loss forofreportable segments Elimination discontinued operations Elimination of inter-segment profitstax Consolidated loss before income Elimination of discontinued operations Consolidated loss before income tax Assets Total assets for reportable segments Assets Elimination of inter-segment assets Total assets fortotal reportable Consolidated assets segments Elimination of inter-segment assets Consolidated segments total assets Geographical

2015 2014 Unit: Thousand Baht (in thousand Baht) 2015 2014 2015 2014 (in thousand Baht) (41,067,228) (515,013) 162,307 18,574 (41,067,228) (515,013) 38,036,617 162,307 18,574 (2,868,304) (496,439) 38,036,617 (2,868,304) (496,439) 29,049,238 68,849,633 (384,471) 8,402,232 29,049,238 68,849,633 28,664,767 77,251,865 (384,471) 8,402,232 28,664,767 77,251,865

Geographical segments Segment 1 - is managed and operates manufacturing facilities and sales offices in Thailand Segment 2 and 3 - operate principally in Thailand. There are no material revenues derived from, Segment 1 - is and operates manufacturing or managed assets located in, foreign countries. facilities and sales offices in Thailand Segment 2 and 3 - operate principally in Thailand. There are no material revenues derived from, or assets located countries. In presenting information on the basisin,offoreign geographical segments, segment revenue is based on the geographical location of customers. Segment assets are based on the geographical location of the In presenting information on the basis of geographical segments, segment revenue is based on the assets. geographical location of customers. Segment assets are based on the geographical location of the assets. Geographical information Geographical information

2015

Revenues

2014 Revenues(Restated) 2015 2014 (in thousand Baht) (Restated) 20,100,903 32,835,336 (in thousand Baht) 71,420 31,854 20,100,903 32,835,336 20,500 147,726 31,854 71,420 3,097 26,547 20,500 147,726 16,651 11,368 3,097 26,547 20,173,005 33,092,397 16,651 11,368 20,173,005 33,092,397

Thailand Japan Thailand United Kingdom Japan Europe United Other Kingdom Europe Total Other Total Major customer

Major customer Revenues from 2 customers of the Group’s segment 1 represent approximately Baht 7,623 million (2014: Baht 20,299 million). Revenues from 2 customers of the Group’s segment 1 represent approximately Baht 7,623 million (2014: Baht 20,299 million).

82 82


Elimination of inter-segment assets Geographical Consolidated segments total assets

(384,471) 28,664,767

8,402,232 77,251,865

Segment 1 - is managed and operates manufacturing facilities and sales offices in Thailand Geographical segments Annual Report 2015 are no material revenues derived from, Segment 2 and 3 - operate principally in Thailand. There Notes to the Financial Statements 245 Sahaviriya Steel Industries Public Company Limited assets located in, foreign countries. facilities and sales offices in Thailand Segment 1 - or is managed and operates manufacturing Segment 2 and 3 - operate principally in Thailand. There are no material revenues derived from, In presenting information on the basisin,offoreign geographical segments, segment revenue is based on the or assets located countries. geographical location of customers. Segment assets are based on the geographical location of the assets. In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. Segment assets are based on the geographical location of the Geographical information assets.

Revenues Unit: Thousand Baht Revenues 2014 Revenues(Restated) 2015 2014 (in thousand Baht) 2015 2014 (Restated) 20,100,903 32,835,336 (Restated) 31,854 (in thousand Baht) 71,420 20,500 147,726 20,100,903 32,835,336 3,097 26,547 31,854 71,420 16,651 11,368 20,500 147,726 20,173,005 33,092,397 3,097 26,547 16,651 11,368 20,173,005 33,092,397

Geographical information

2015

Thailand Japan United Kingdom Thailand Europe Japan Other United Kingdom Total Europe Other Major customer Total

Revenues from 2Industries customers ofPublic the Group’s segment Limited, 1 represent its approximately Baht Sahaviriya Steel Company Subsidiaries Major customer (2014: Baht 20,299 million). and its JointSteel Venture Sahaviriya Industries Public Company Limited, its Subsidiaries Revenues from 2 customers of the Group’s segment 1 represent approximately Baht Notes to the financial statements and its Joint (2014: BahtVenture 20,299 million).

7,623 million 7,623 million

Notes to the financial statements 23 23

Selling expenses Selling expenses

Distribution expenses Employee benefit expenses Distribution expenses Others Employee benefit expenses Total Others

24 24

Total

Administrative expenses Administrative expenses

Employee benefit expenses Travelling expenses Employee benefit expenses Bad debt and doubtful expenses Travelling expenses Depreciation and amortisation expenses Bad debt and doubtful expenses Rental and utility expenses Depreciation and amortisation expenses Loss on written-off assets Rental and utility expenses Professional fee Loss on written-off assets Taxes and other fees Professional fee Advertisement and public relation expenses Taxes and other fees Insurance premium expenses Advertisement and public relation expenses Wages and salaries Insurance premium expenses Training expenses Wages and salaries Supplies Training expenses Loss from sale raw materials Supplies Penalty Loss from sale raw materials Idle cost Penalty Others Idle cost Total Others

Consolidated Separate Unit: Thousand Baht financial statements financial statements Consolidated Consolidated financial statements SeparateSeparate financial statements 2015 2014 2015 2014 financial statements financial statements 2015 2014 2015 2014 (in thousand Baht) 2015 2014 2015 2014 308,046 269,652 308,046 269,652 (in thousand Baht) 30,351 32,030 22,817 23,740 308,046 269,652 308,046 269,652 82 6,417 9,146 4,934 5,117 30,351 32,030 22,817 23,740 344,814 310,828 335,797 298,509 6,417 9,146 4,934 5,117 82

344,814

310,828

335,797

298,509

Consolidated Separate financial statements financial statements Consolidated Separate 2015 2014 2015 2014 financial statements financial statements (Restated) 2015 2014 2015 2014 (in thousand Baht) (Restated) 278,565 280,805 242,530 260,564 (in thousand Baht) 24,925 71,278 22,891 67,563 278,565 280,805 242,530 260,564 35,960 42,110 34,938 37,203 24,925 71,278 22,891 67,563 72,485 37,760 33,599 33,472 35,960 42,110 34,938 37,203 34,586 32,736 27,141 25,681 72,485 37,760 33,599 33,472 1,958 155 1,958 155 34,586 32,736 27,141 25,681 38,474 14,630 34,901 12,247 1,958 155 1,958 155 16,070 11,647 11,391 9,335 38,474 14,630 34,901 12,247 6,095 8,524 5,402 8,524 16,070 11,647 11,391 9,335 12,307 7,812 11,409 7,474 6,095 8,524 5,402 8,524 5,470 6,357 12,307 7,812 11,409 7,474 1,270 2,119 787 1,740 5,470 6,357 4,332 1,299 3,904 1,299 1,270 2,119 787 1,740 59,238 41,973 59,740 4,332 1,299 3,904 1,299 457,912 457,912 59,238 41,973 59,740 108,952 65,616 457,912 457,912 10,388 166,867 47,067 103,446 108,952 65,616 1,168,987 726,072 1,061,186 568,703 10,388 166,867 47,067 103,446


23

Selling expenses

246

Notes to the Financial Statements Distribution expenses Distribution expenses Employee benefit expenses Employee benefit expenses Others Others Total Total

24 24

Administrative expenses Administrative expenses

Employee benefit expenses Employee benefit expenses Travelling expenses Travelling expenses Bad debt and doubtful expenses Bad debt and and doubtful expenses Depreciation amortisation expenses Depreciation and amortisation expenses Rental and utility expenses Rental and utility expenses Loss on written-off assets Loss on written-off assets Professional fee Professional fee Taxes and other fees Taxes and otherand fees Advertisement public relation expenses Advertisement and relation expenses Insurance premium public expenses Insurance premium expenses Wages and salaries Wages and salaries Training expenses Training expenses Supplies Supplies Loss from sale raw materials Loss from sale raw materials Penalty Penalty Idle cost Idle cost Others Others Total Total

Consolidated Separate Consolidated Separate financial statements financial statements financial statements financial statements 2015 2014 2015 2014 Annual Report 2015 2015 2014 2015 2014 (in thousand Baht) Sahaviriya Steel Industries Public Company Limited (in thousand Baht) 308,046 269,652 308,046 269,652 308,046 269,652 308,046 269,652 30,351 32,030 22,817 23,740 30,351 32,030 22,817 23,740 6,417 9,146 4,934 5,117 6,417 9,146 4,934 5,117 344,814 310,828 335,797 298,509 344,814 310,828 335,797 298,509

Unit: Thousand Baht Consolidated Separate Consolidated Separate financial statements financial statements Consolidated financial statements Separate financial statements financial statements financial statements 2015 2014 2015 2014 2015 2015 2014 2015 2014 2014 2015 2014 (Restated) (Restated) (Restated) (in thousand Baht) (in thousand Baht) 278,565 280,805 242,530 260,564 278,565 280,805 242,530 260,564 24,925 71,278 22,891 67,563 24,925 71,278 22,891 67,563 35,960 42,110 34,938 37,203 35,960 42,110 34,938 37,203 72,485 37,760 33,599 33,472 72,485 37,760 33,599 33,472 34,586 32,736 27,141 25,681 34,586 32,736 27,141 25,681 1,958 155 1,958 155 1,958 155 1,958 155 38,474 14,630 34,901 12,247 38,474 14,630 34,901 12,247 16,070 11,647 11,391 9,335 16,070 11,647 11,391 9,335 6,095 8,524 5,402 8,524 6,095 8,524 5,402 8,524 12,307 7,812 11,409 7,474 12,307 7,812 11,409 7,474 5,470 6,357 5,470 6,357 1,270 2,119 787 1,740 1,270 2,119 787 1,740 4,332 1,299 3,904 1,299 4,332 1,299 3,904 1,299 59,238 41,973 59,740 59,238 41,973 59,740 457,912 457,912 -457,912 457,912 108,952 65,616 -108,952 65,616 10,388 166,867 47,067 103,446 10,388 166,867 47,067 103,446 1,168,987 726,072 1,061,186 568,703 1,168,987 726,072 1,061,186 568,703

83 83


Notes to the Financial Statements

Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture and Venture Notesits to Joint the financial statements

247

Notes to the financial statements 25 25

Employee benefit expenses Employee benefit expenses

Management Management Wages and salaries Wages salaries Definedand benefit plans Defined benefit Post employmentplans benefit plan Post employment benefit plan Long-term employee benefits Long-term employee benefits Other employees Other Wagesemployees and salaries Wages salaries Definedand benefit plans Defined benefit Post employmentplans benefit plan Post employment benefit plan Long-term employee benefits Long-term employee benefits Total Total

Unit: Thousand Baht Consolidated Separate Consolidated Separate financial statements financial statements Consolidated financial statements Separate financial statements financial statements financial statements 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 (Restated) (Restated) (Restated) (in thousand Baht) (in thousand Baht) 68,832 68,832 3,932 3,932 1,931 1,931 16 16 74,711 74,711

70,142 70,142 3,569 3,569 1,814 1,814 15 15 75,540 75,540

50,357 50,357 2,824 2,824 1,809 1,809 13 13 55,003 55,003

58,610 58,610 2,850 2,850 1,700 1,700 12 12 63,172 63,172

662,824 662,824 35,952 35,952 21,529 21,529 2,655 2,655 722,960 722,960 797,671 797,671

752,547 752,547 35,852 35,852 19,898 19,898 2,726 2,726 811,023 811,023 886,563 886,563

474,646 474,646 25,945 25,945 15,279 15,279 1,713 1,713 517,583 517,583 572,586 572,586

538,368 538,368 25,847 25,847 14,204 14,204 1,759 1,759 580,178 580,178 643,350 643,350

Defined contribution plans Defined contribution plans

The defined contribution plans comprise provident funds established by the Group for its employees. The defined contribution plans funds established by the Groupbyfor employees. Membership of the funds is on acomprise voluntaryprovident basis. Contributions are made monthly theitsemployees at Membership of the funds is on a voluntary basis. Contributions are made monthly by the employees at rates ranging from 5% to 10% of their basic salaries and by the Group at rates ranging from 5% to rates ranging from 5% to 10% of their basic salaries and by the Group at rates ranging from 5% to 10% of the employees’ basic salaries. The provident funds are registered with the Ministry of Finance 10% of theentities employees’ basic salaries. provident funds are registered with the Ministry of Finance as juristic and are managed by The a licensed Fund Manager. as juristic entities and are managed by a licensed Fund Manager.

84 84


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes to the Financial Statements

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Sahaviriya Industries Public Company Limited, its Subsidiaries and its JointSteel Venture Notes to Joint the financial statements and its Venture 248

Notes to the financial statements 26 26

27 27

Expenses by nature Expenses by nature

Changes in inventories of finished goods and work in progress Changes in inventories of finished Raw materials andinconsumables goods and work progress used Employee benefit Raw materials andexpenses consumables used Sub-contractor andexpenses wage Employee benefit Fuel oil and electrical expenses Sub-contractor and wage Depreciation and amortisation Fuel oil and electrical expensesexpenses Maintenance Depreciation expenses and amortisation expenses Transportation expenses Maintenance expenses Loss on decline in value of inventories Transportation expenses (reversal) Loss on decline in value of inventories Professional (reversal) fee Minimum lease Professional fee payments recognised as an operating lease expenses Minimum lease payments recognised Bad debt and doubtful as an operating lease expenses expenses Advertising publicexpenses relation expenses Bad debt andand doubtful Loss recognised on the liquidation of Advertising and public relation expenses subsidiary Loss recognised on the liquidation of Loss from sale raw materials subsidiary Penalty Loss from sale raw materials Others Penalty Total cost of sales of goods and cost of Others rendering services, selling Total cost of of sales of goods and expenses cost of and administrative expenses rendering of services, selling expenses and administrative expenses

Finance costs Finance costs

Interest expenses Bank charges Interest expenses Loss on interest rate swap agreements Bank charges Totalon interest rate swap agreements Loss Total

Consolidated Separate Unit: Thousand Baht financial statements financial statements Consolidated Separate Consolidated financial statements Separate financial statements 2015 2014 2015 2014 financial statements financial statements 2015 2014 2015 2014 (Restated) 2015 2014 2015 2014 (Restated) (in thousand Baht) (Restated) (in thousand Baht) 1,639,638 610,038 1,689,494 755,387 15,141,971 27,455,264 15,077,614 27,081,389 1,639,638 610,038 1,689,494 755,387 722,960 811,023 517,583 580,178 15,141,971 27,455,264 15,077,614 27,081,389 235,566 199,717 722,960 811,023 517,583 580,178 395,289 508,409 575,638 736,870 235,566 199,717 467,735 597,867 348,103 466,395 395,289 508,409 575,638 736,870 159,790 256,167 153,244 246,887 467,735 597,867 348,103 466,395 311,323 271,475 308,046 269,652 159,790 256,167 153,244 246,887 311,323 271,475 308,046 269,652 (239,139) 454,151 (239,139) 454,151 38,474 14,630 34,901 12,247 (239,139) 454,151 (239,139) 454,151 38,474 14,630 34,901 12,247 34,535 33,190 34,535 33,190 43,960 42,110 34,938 37,203 34,535 33,190 34,535 33,190 8,709 16,304 8,017 16,264 43,960 42,110 34,938 37,203 8,709 16,304 8,017 16,264 64,328,526 59,970 41,973 59,740 -64,328,526 431,031 431,031 -59,970 41,973 59,740 1,454,445 560,490 1,406,756 469,965 431,031 431,031 1,454,445 560,490 1,406,756 469,965 20,906,257 20,906,257

31,872,808 31,872,808

84,769,027 84,769,027

31,159,778 31,159,778

Consolidated Separate financial statements financial statements Consolidated Separate 2015 2014 2015 2014 financial statements financial statements (Restated) 2015 2014 2015 2014 (in thousand Baht) (Restated) 2,376,516 1,691,175 2,345,440 1,669,894 (in thousand Baht) 9,234 7,555 8,909 7,203 2,376,516 1,691,175 2,345,440 1,669,894 2,599 12,587 2,599 12,587 9,234 7,555 8,909 7,203 2,388,349 1,711,317 2,356,948 1,689,684 2,599 12,587 2,599 12,587 2,388,349 1,711,317 2,356,948 1,689,684

85 85


27 27

Advertising publicexpenses relation expenses Bad debt andand doubtful Loss recognised on the relation liquidation of Advertising and public expenses subsidiary Loss recognised on the liquidation of Loss from sale raw materials subsidiary Notes tofrom the Financial Statements Penalty Loss sale raw materials Others Penalty Total cost of sales of goods and cost of Others rendering services, selling Total cost of of sales of goods and expenses cost of and administrative expenses rendering of services, selling expenses and administrative expenses

Finance costs Finance costs

Interest expenses Bank charges Interest expenses Sahaviriya Steel Industries Public Loss on interest rate swap agreements Bank charges Sahaviriya Industries Public and its JointSteel Venture Total Loss on interest rate swap agreements Notes to the financial statements and its Joint Venture Total

Notes to the financial statements 28 28

8,709 16,304 43,960 42,110 8,709 16,304 59,970 41,973 Annual Report 2015 431,031 - Limited 59,970 41,973 Sahaviriya Steel Industries Public Company 1,454,445 560,490 431,031 1,454,445 560,490 20,906,257 20,906,257

31,872,808 31,872,808

8,017 34,938 8,017 64,328,526 59,740 64,328,526 431,031 59,740 1,406,756 431,031 1,406,756 84,769,027 84,769,027

16,264 37,203 16,264 - 249 469,965 469,965 31,159,778 31,159,778

Consolidated Separate Unit: Thousand Baht financial statements financial statements Consolidated Separate Consolidated financial statements Separate financial statements 2015 2014 2015 2014 financial statements financial statements 2015 2015 2014 2015 2014 (Restated) 2014 2015 2014 (Restated) (in thousand Baht) (Restated) 2,376,516 1,691,175 2,345,440 1,669,894 (in thousand Baht) 9,234 7,555 8,909 7,203 2,376,516 2,345,440 1,669,894 Company Limited,1,691,175 its Subsidiaries 2,599 12,587 2,599 12,587 8,909 7,203 Company9,234 Limited, its7,555 Subsidiaries 2,388,349 1,711,317 2,356,948 1,689,684 2,599 12,587 2,599 12,587 2,388,349 1,711,317 2,356,948 1,689,684

Income tax expense Income tax expense

Income tax recognised in profit or loss Income tax recognised in profit or loss

Consolidated Separate Unit: Thousand Baht financial statements financial statements Consolidated Separate Consolidated financial statements Separate financial statements Note 2015 2014 2015 2014 financial statements financial statements Note 2015 2014 2015 2014 (in thousand Baht) Note 85 2015 2014 2015 2014 Current tax expense (in thousand Baht) 85 5,854 Current 4,452 Currentyear tax expense Deferred tax expense Current year 5,854 4,452 Movements temporary differences 14 (13,709) (29,898) (149) Deferred taxinexpense Total (7,855) (25,446) (149) Movements in temporary differences 14 (13,709) (29,898) (149) -Total (7,855) (25,446) (149) Income tax recognised in other comprehensive income Income tax recognised in other comprehensive income Consolidated financial statements 2015Consolidated financial statements 2014 Tax Tax 2015 2014 Before (expense) Net of Before (expense) Net of Tax Tax tax benefit taxof tax benefit taxof Before (expense) Net Before (expense) Net (intax thousand Baht) tax benefit tax benefit tax Foreign currency (in thousand Baht) translation differences Foreign currency for foreign differences operations (555,555) (555,555) (37,582) (37,582) translation Impairment on for foreignloss operations (555,555) (555,555) (37,582) (37,582) property, plant and Impairment loss on equipmentplant previously property, and revalued previously (92,130) 18,426 (73,704) equipment Depreciation revalued on (92,130) 18,426 (73,704) revaluation on surplus (179,170) 36,011 (143,159) (237,112) 48,402 (188,710) Depreciation Defined benefit plan revaluation surplus (179,170) 36,011 (143,159) (237,112) 48,402 (188,710) actuarial lossesplan (13,388) (514) (13,902) Defined benefit Total (826,855) 54,437 (772,418) (288,082) 47,888 (240,194) actuarial losses (13,388) (514) (13,902) Total (826,855) 54,437 (772,418) (288,082) 47,888 (240,194) Separate financial statements 2015 Separate financial statements 2014 Tax Tax 2015 2014 Before (expense) Net of Before (expense) Net of Tax Tax tax benefit tax tax benefit taxof Before (expense) Net of Before (expense) Net (in thousand Baht) tax benefit tax tax benefit tax Impairment loss on (in thousand Baht) property, plant and Impairment loss on equipment previously property, plant and


28

Income tax expense

Consolidated and JointSteel Venture Sahaviriya Industries Public Company Limited, its Subsidiaries Separate 28 its Income tax expense financial statements financial statements Income taxVenture recognised in profit or loss Notes to Joint the financial statements and its Note 2015 2014 2015 2014

NotesIncome to the financial statements tax recognised in profit or loss Notes to the Financial Statements 250 Current tax expense 28 Income tax expense Current year Note Deferredtax taxexpense expense 28 Income

Annual Report(in 2015thousand Baht) Separate Consolidated Sahaviriya Steel Industries Public Companyfinancial Limited financial statements statements Consolidated 4,452 5,854 - Separate 2014 2015 2014 2015 financial statements financial statements (in thousand Baht) 2015 2014 2015(149) 2014 (13,709) (29,898) (in thousand Baht) (7,855) (25,446) (149) 5,854 - Separate - Consolidated 4,452

Income tax recognised in profit or loss Note Movements in temporary differences 14 Current tax expense Total Income tax recognised in profit or loss Current year Current tax expense Deferred tax expense financial statements financial statements Current 5,854 4,452 - Separate Incomeyear taxinrecognised other comprehensive income Consolidated Movements temporaryin differences 14 (13,709) (29,898) (149) Note 2015 2014 2015 2014 Deferred tax expense financial statements financial statements Total (7,855) (25,446) (149) -(in thousand Baht) Movements in temporary differences Note 14 (13,709) (29,898) (149) Unit: Thousand Consolidated financial statements 2015 2014 2015 2014 Baht Current Total tax expense (7,855) (25,446) (149) 2015 2014 (in thousand Baht) Income tax recognised in other comprehensive income Consolidated financial statements Current 4,452 Tax 5,854 Tax Currentyear tax expense Deferred tax expense 2015 2014 Income tax recognised in other comprehensive income Before (expense) Before Net Current year 5,854 Net of 4,452 - of Consolidated statements -(expense) Movements temporary differences 14 benefit (13,709) tax financial (29,898) (149) -tax tax tax benefit Deferred taxinexpense 2015 (7,855) 2014 Total (25,446) (149) -Consolidated financial statements Baht) Movements in temporary differences 14 Tax (13,709)(in thousand (29,898) (149) Tax 2015 2014 Foreign currency Total (149) - of Before (expense)(7,855) Net of (25,446) Before (expense) Net Taxincome Tax Income tax recognised in other comprehensive translation differences tax benefit tax tax benefit tax Before (expense) Net of Before Net of for foreign operationsin other (555,555) (555,555) (37,582) (expense) (37,582) Income tax recognised comprehensive income (in thousand Baht) Consolidated financial statements tax benefit tax tax benefit tax Impairment loss on Foreign currency 2015Consolidated (in thousand Baht) property, plant and financial statements 2014 translation differences Tax Tax Foreign currency equipment previously 20152014 for foreign operations (555,555) (555,555) (37,582) (37,582) Before (expense) Net of Before (expense) Net of translation differences revalued loss on (92,130) 18,426 (73,704) Tax TaxImpairment tax benefit tax tax benefit taxof for foreign operations (555,555) (555,555) (37,582) (37,582) Depreciation on Before (expense) Net of Before (expense) Net property, plant and (in thousand Baht) Impairment losssurplus on revaluation (179,170) 36,011 (143,159) (237,112) 48,402 (188,710) tax benefit tax tax benefit tax equipment previously Foreign currency property, plant and Defined benefit plan (in thousand Baht) revalued (92,130) 18,426 (73,704) translation differences equipment previously actuarial losses (13,388) (514) (13,902) Foreign currency Depreciation on for foreign differences operations (555,555) (555,555) (37,582) (37,582) revalued (92,130) 18,426 (73,704) Total (826,855) 54,437 (772,418) (288,082) 47,888 (240,194) translation revaluationloss surplus (179,170) 36,011 (143,159) (237,112) 48,402 (188,710) Impairment on Depreciation on for foreign operations (555,555) (555,555) (37,582) (37,582) Defined benefit plan property, plant and revaluation surplus (179,170) 36,011Separate (143,159) (237,112) 48,402 (188,710) Impairment loss on financial statements actuarial losses (13,388) (514) (13,902) equipment previously Defined benefit plan property, plant and 2015 2014 Total (826,855) 54,437 (772,418) (288,082) 47,888 (240,194) revalued (92,130) 18,426 (73,704) actuarial losses (13,388) (514) (13,902) equipment previously Tax Tax Depreciation on Total (826,855) 54,437 (772,418) (288,082) 47,888 (240,194) revalued (92,130) 18,426Separate (73,704) Before (expense) Netfinancial of Before (expense) Net- of statements revaluation on surplus (179,170) 36,011 (143,159) (237,112) 48,402 (188,710) Depreciation tax benefit tax tax benefit tax 2015 2014 Defined benefit plan Separate financial statements revaluation surplus (179,170) 36,011 (143,159) (237,112) 48,402 (188,710) (in thousand Baht) Tax Tax Baht actuarial lossesplan (13,388) (514)Unit: Thousand (13,902) 20152014 Defined benefit Impairment loss on Before (expense) Net of Before (expense) Net of Total (826,855) 54,437 (772,418) (288,082) 47,888 (240,194) Separate- financial statements Tax Tax actuarial (13,388) (514) (13,902) property,losses plant and taxbenefit tax tax benefit tax Before (expense) Net of Before (expense) Net of equipment previously (826,855) Total 54,437 (772,418) (288,082) 47,888 (240,194) 2015 2014 (in thousand Baht) Separate tax benefit taxfinancial statements taxbenefittax revalued loss on (92,130) 18,426 (73,704) Impairment 2015 2014 (in thousand Baht) Depreciation on Separate financial statements property, plant and Tax Tax Impairment losssurplus on revaluation (159,637) 32,412 (127,225) (214,990) 43,623 (171,367) 2015 2014 equipment previously Before (expense) Net of Before (expense) Net of property, plant plan and Defined benefit Tax Taxrevalued (92,130) 18,426 (73,704) tax benefit tax tax benefit tax-of equipment previously actuarial losses (15,960) (15,960) Before (expense) Net of Before (expense) Net Depreciation on (intax thousand Baht) revalued (92,130) 18,426 (73,704) Total (251,767) 50,838 (127,225) (200,929) (230,950) 43,623 (187,327) tax benefit tax benefit taxrevaluation surplus (159,637) 32,412 (214,990) 43,623 (171,367) Impairment Depreciationloss on on (in thousand Baht) Defined benefit plan property, plant and revaluation surplus (159,637) 32,412 (127,225) (214,990) 43,623 (171,367) Impairment loss on actuarial losses (15,960) (15,960) equipment previously Defined benefit plan property, plant and Total (251,767) 50,838 (200,929) (230,950) 43,623 (187,327) revalued (92,130) 18,426 (73,704) actuarial losses (15,960) (15,960) equipment previously 86 Depreciation on Total (251,767) 50,838 (200,929) (230,950) 43,623 (187,327) revalued (92,130) 18,426 (73,704) revaluation on surplus (159,637) 32,412 (127,225) (214,990) 43,623 (171,367) Depreciation Defined benefit plan revaluation surplus (159,637) 32,412 (127,225) (214,990) 43,623 (171,367) actuarial losses (15,960) (15,960) 86 Defined benefit plan Total (251,767) 50,838 (200,929) (230,950) 43,623 (187,327) actuarial losses (15,960) (15,960) 86 Total (251,767) 50,838 (200,929) (230,950) 43,623 (187,327) 86 86


Annual Report 2015 Sahaviriya Steel Industries Public Company Limited

Notes to the Financial Statements

Sahaviriya Steel Industries Public Company Limited, its Subsidiaries and its Joint Venture Sahaviriya Steel Industries Public Company Limited, its Subsidiaries Notes to the financial statements and its Joint Venture Sahaviriya Steel Industries Notes to the financial statementsPublic Company Limited, its Subsidiaries and its Joint Venture Reconciliation of effective tax rate Notes to the financial statements

Reconciliation of effective tax rate

251

Consolidated statements Consolidatedfinancial financial statements 2015 2014 Rate 2015 2014 Reconciliation of effective tax rate Consolidated (in thousand financial Rate statements (in thousand 2015Baht) 2014Baht) (%) (%) Rate Consolidated (in thousand financial Ratestatements (in thousand Loss before income tax expense (2,868,304) (4,892,278) (%) Baht) (%) Baht) 2015 2014 Income tax using the Thai corporation tax rate 20 (573,661) 20 (978,456) Rate (in thousand Rate (in thousand Loss before income expense (2,868,304) (4,892,278) Effect of different taxtax rates in foreign jurisdictions 1 (29,558) (%) Baht) (%) Baht) Incomenot taxsubject using the Thai corporation tax rate (573,661) (978,456) Income to tax 120 (25,176) 320 (169,738) Loss before income taxrates expense (2,868,304) (4,892,278) Effect of not different tax in foreign jurisdictions (29,558) Expenses deductible for tax purposes (3)73,555 (1)1 40,942 Income not subject tax unrecognised 1 (25,176) 3 (169,738) tax using thetoThai corporation tax (573,661) (978,456) Recognition of previously taxrate losses -20 220 (79,014) Effect of different tax foreign jurisdictions 1 (29,558) Expenses notlosses deductible forintax purposes (3) 73,555 (1) 40,942 Current year for rates which no deferred tax Income notrecognised subject to tax unrecognised tax losses 1(25,176) (169,738) Recognition of previously 23 (79,014) asset was (21) 603,356 (21) 1,046,720 Expensesyear notdeferred deductible for tax purposes (3) 73,555 (1) 40,942 Current losses for noand deferred taxtax Unrecognise taxwhich assets deferred Recognition of previously 2 (79,014) asset wasduring recognised (21) 603,356 (21) 1,046,720 liabilities the year unrecognised tax losses 3(85,929) (3) 160,724 Unrecognise deferred assets deferred Current year losses fortax which noand deferred tax tax Others (17,066) asset was during recognised (21) 603,356 (21) 1,046,720 liabilities the year (85,929) 160,724 Total -3 (7,855) 1(3) (25,446) Unrecognise deferred tax assets and deferred tax Others (17,066) liabilities during the year 3(85,929) (3) 160,724 Total (7,855) 1 Separate financial statements (25,446) Others 2015 2014 (17,066) Total (7,855) 1 (25,446) Separate financial statements Rate (in thousand Rate (in thousand 2015 2014 (%) Baht) (%) Baht) Rate (in thousand Rate (in thousand Separate financial statements Loss before income tax expense (67,123,662) (346,270) (%) Baht) (%) Baht) 2015 2014 Income tax using the Thai corporation tax rate 20 (13,424,732) 20 (69,254) Rate (in thousand Rate (in thousand Loss before income tax expense (67,123,662) (346,270) Income not subject to tax (6,173) 5 (16,900) (%) Baht) (%) Baht) Income tax the Thai (13,424,732) 20 (69,254) Expenses notusing deductible forcorporation tax purposestax rate -20 47,226 (12) 40,009 Loss before income tax expense (67,123,662) (346,270) Income not of subject to tax unrecognised tax losses (6,173) (16,900) Recognition previously (1)568,238 235 (79,014) Income taxnot using the Thai corporation tax ratetax 20 (13,424,732) 20 (69,254) Expenses deductible tax purposes 47,226 (12) 40,009 Unrecognised deferred taxfor assets and deferred Income notduring subject tax unrecognised tax losses (6,173) 5 (16,900) Recognition of previously (1) 568,238 23 (79,014) liabilities thetoyear (19) 12,815,292 (36) 125,159 Unrecognised deferred tax and deferred tax Expenses not deductible forassets tax purposes 47,226 (12) 40,009 Total -(149) Recognition of previously (1) 568,238 23 (79,014) liabilities during the year unrecognised tax losses (19) 12,815,292 (36) 125,159 Unrecognised deferred tax assets and deferred tax Total (149) Income tax reduction liabilities during the year (19) 12,815,292 (36) 125,159 Total - grants the reduction (149) to 20% - of net taxableIncome tax reduction Royal Decree No. 577 B.E. 2557 dated 10 November 2014 profit for the accounting period 2015 which begins on or after 1 January 2015. Royal Decree No. 577 B.E. 2557 dated 10 November 2014 grants the reduction to 20% of net taxable Income tax reduction profit the accounting 2015Legislative which begins on or after January 2015. On 22 for January 2016, Theperiod National Assembly has 1approved a reduction of the corporate Royal Decree 577 B.E.to2557 November grants the reduction 20% of net taxable income tax rateNo. from 30% 20% dated of net10 taxable profit2014 for the accounting periodtowhich begins on or profit for the accounting period 2015Legislative which begins on or after January 2015. On 22 January 2016, The National Assembly has1 approved a reduction of the corporate after 1 January 2016. income tax rate from 30% to 20% of net taxable profit for the accounting period which begins on or On Group 221 January January 2016, The Nationaltax Legislative Assembly has approved reduction of the corporate after 2016. The has applied the reduced rate of 20% in measuring deferredatax assets and liabilities as tax rate2015 fromand 30% to 20% of net taxable for the accounting which begins on or atincome 31 December 2014 in accordance with profit the clarification issued byperiod the FAP in 2012. afterGroup 1 January The has 2016. applied the reduced tax rate of 20% in measuring deferred tax assets and liabilities as at 31 December 2015 and 2014 in accordance with the clarification issued by the FAP in 2012. The Group has applied the reduced tax rate of 20% in measuring deferred tax assets and liabilities as at 31 December 2015 and 2014 in accordance with the clarification issued by the FAP in 2012.

87 87


252

Income tax using the Thai corporation tax rate Loss before income expense Effect of different taxtax rates in foreign jurisdictions tax subject using the Income not to Thai tax corporation tax rate Effect of different tax rates jurisdictions Expenses not deductible forin taxforeign purposes Income not subject to tax unrecognised tax losses Recognition of previously Notesyear tonot thelosses Financial Statements Expenses deductible for tax Current for which nopurposes deferred tax Recognition of previously unrecognised tax losses asset was recognised Current year deferred losses fortax which noand deferred tax tax Unrecognise assets deferred asset was during recognised liabilities the year Unrecognise deferred tax assets and deferred tax Others liabilities during the year Total Others Total

Loss before income tax expense Income tax using the Thai corporation tax rate Loss before incometotax Income not subject taxexpense Income tax the Thai tax rate Expenses notusing deductible forcorporation tax purposes Income not subject to tax unrecognised tax losses Recognition of previously Expenses not deductible forassets tax purposes Unrecognised deferred tax and deferred tax Recognition of previously liabilities during the year unrecognised tax losses Unrecognised deferred tax assets and deferred tax Total liabilities during the year Total Income tax reduction

(%) 20 20 1 (3) -1 (3) (21) (21) 3 -3 Rate (%) Rate (%) 20 20 (1) (1) (19) (19) -

Baht) (%) (573,661) 20 (2,868,304) 1 (573,661) 20 (25,176) 3 1 73,555 (1) 23 Annual Report(25,176) 2015 Sahaviriya Steel73,555 Industries Public Company Limited (1) 2 603,356 (21)

Baht) (978,456) (4,892,278) (29,558) (978,456) (169,738) (29,558) 40,942 (169,738) (79,014) 40,942 (79,014) 1,046,720

603,356 (21) 1,046,720 (85,929) (3) 160,724 (17,066) (85,929) (3) 160,724 (7,855) 1 (25,446) Separate - financial statements (17,066) (7,855) 1 2015 2014 Separate financial statements (25,446) 2015 2014 Separate financial statements (in thousand Rate (in thousand 2015Baht) 2014 Baht) (%) (in thousand Rate (in(346,270) thousand (67,123,662) Baht) (%) Baht) (13,424,732) 20 (69,254) (67,123,662) (346,270) (6,173) 5 (16,900) (13,424,732) 20 (69,254) 47,226 (12) 40,009 (6,173) 5 (16,900) 568,238 23 (79,014) 47,226 (12) 40,009 568,238 23 (79,014) 12,815,292 (36) 125,159 (149) 12,815,292 (36) 125,159 (149) -

Income tax reduction Royal Decree No. 577 B.E. 2557 dated 10 November 2014 grants the reduction to 20% of net taxable profit for the accounting period 2015 which begins on or after 1 January 2015. Royal Decree No. 577 B.E. 2557 dated 10 November 2014 grants the reduction to 20% of net taxable profit the accounting 2015Legislative which begins on or after January 2015. On 22for January 2016, Theperiod National Assembly has1approved a reduction of the corporate income tax rate from 30% to 20% of net taxable profit for the accounting period which begins on or On 22 January 2016. 2016, The National Legislative Assembly has approved a reduction of the corporate after 1 January income tax rate from 30% to 20% of net taxable profit for the accounting period which begins on or afterGroup 1 January The has 2016. applied the reduced tax rate of 20% in Limited, measuring deferred tax assets and liabilities as Sahaviriya Steel Industries Public Company its Subsidiaries at 31 December 2015 and 2014 in accordance with the clarification issued by the FAP in 2012. and its Joint Venture The Group has applied the reduced tax rate of 20% in measuring deferred tax assets and liabilities as Notes to the financial statements at 31 December 2015 and 2014 in accordance with the clarification issued by the FAP in 2012.

29

Promotional privileges By virtue of the provisions of the Industrial Investment Promotion Act of B.E. 2520, the Group has been granted privileges by the Board of Investment relating to (1) the manufacture of hot rolled coils and hot rolled pickled and oiled coils (2) the provision of marine shipping services (3) the provision of highpowered tug boat services (4) the manufacture of industrial machinery and equipment, mechanical parts, and the repair and improvement of industrial machinery and equipment and steel structures for industrial 87 use. The privileges granted include:

87

(a)

exemption from payment of import duty on machinery approved by the Board;

(b)

exemption from payment of import duty on essential raw materials and supplies imported;

(c)

exemption from payment of income tax for sales of hot rolled coils and hot rolled pickled and oiled coils, to the extent that the amount sold does not exceed 1.6 million tons a year, for a period of 8 years from the date on which the income is first derived from such operations (13 May 2004);

(d)

exemption from payment of income tax on net income from the provision of marine shipping services, for a period of 8 years from the date on which the income is first derived from such operations (14 November 2006) to the extent that the amount of tax exempted does not exceed 100 percent of the total investment made, excluding the price of land and working capital. The amount of income tax exempted thus must not exceed Bath 1,146 million, and such cap is to be adjusted according to the actual capital investment (excluding land cost and working capital) as of the started date operation of the project commences. In addition, the privilege also includes an exemption from payment of import duty on machinery approved by the Board;


29

Promotional privileges By virtue of the provisions of the Industrial Investment Promotion Act of B.E. 2520, the Group has been Annual Report 2015 Notes to theprivileges Financial Statements Sahaviriyato Steel(1) Industries Company Limited granted by the Board of Investment relating thePublicmanufacture of hot rolled coils and hot 253 rolled pickled and oiled coils (2) the provision of marine shipping services (3) the provision of highpowered tug boat services (4) the manufacture of industrial machinery and equipment, mechanical parts, and the repair and improvement of industrial machinery and equipment and steel structures for industrial use. The privileges granted include: (a)

exemption from payment of import duty on machinery approved by the Board;

(b)

exemption from payment of import duty on essential raw materials and supplies imported;

(c)

exemption from payment of income tax for sales of hot rolled coils and hot rolled pickled and oiled coils, to the extent that the amount sold does not exceed 1.6 million tons a year, for a period of 8 years from the date on which the income is first derived from such operations (13 May 2004);

(d)

exemption from payment of income tax on net income from the provision of marine shipping services, for a period of 8 years from the date on which the income is first derived from such operations (14 November 2006) to the extent that the amount of tax exempted does not exceed 100 percent of the total investment made, excluding the price of land and working capital. The amount of income tax exempted thus must not exceed Bath 1,146 million, and such cap is to be adjusted according to the actual capital investment (excluding land cost and working capital) as of the started date operation of the project commences. In addition, the privilege also includes an exemption from payment of import duty on machinery approved by the Board;

(e)

exempt